Business News Round Up (14/02/2023)

Brexit cost UK economy £29bn with investment ‘stopped in its tracks’. Bank of England policymaker says

Brexit caused investment in UK businesses to plateau and dealt a productivity penalty worth £29 billion, or £1,000 per household, a Bank of England policymaker has said. Jonathan Haskel, an external member of the Bank’s Monetary Policy Committee (MPC), said in an interview that a wave of investment was “stopped in its tracks” in 2016 following the Brexit vote. Mr Haskel was asked by Matthew C Klein, the founder of web newsletter The Overshoot, what he thinks about Britain being an “extreme outlier” when it comes to facing a slowdown in productivity. He said: “Yes, we suffered much more. A bit of that is that we have this larger financial sector. But I think it really goes back to Brexit. If you look in the period up to 2016, it’s true that we had a bigger slowdown in productivity up to 2016, but we had a lot of investment. We had a big boom between 2012-ish to 2016. But then investment just plateaued from 2016, and we dropped to the bottom of G7 countries.” Mr Haskel went on: “I say we were at the top of the wave of investment in 2012. If we pushed that out a little bit, then our slowdown may not have looked quite so bad, but it was stopped in its tracks in 2016.” The influential economist explained that the Brexit referendum had an impact on productivity as a result of the reduction in trade, with the UK opting to leave the European Union (EU) and consequently secure new trade deals.

https://www.insider.co.uk/news/brexit-cost-uk-economy-29bn-29206751

Scotland’s workforce grows by 89,000 in a year

The number of people in work in Scotland has grown by almost 89,000, according to new figures. Official statistics also reveal a sharp decline in the number of “economically inactive” people between October and December 2022. They suggest they are deciding to join the workforce, with the employment rate hitting a record high of 76.6%. The Office for National Statistics (ONS) also found pay is rising at the fastest rate in more than 20 years. But it is still failing to keep up with rising prices. The ONS Labour force survey reveals that 2.7million people aged over 16 were in employment in Scotland towards the end of 2022. That is 89,000 more than for the same period in 2021. A large number of those appear to have been previously classed as “economically inactive” by the ONS. They include those with long term illnesses, as well as students and people looking after family. It rose significantly following the pandemic.

https://www.bbc.co.uk/news/uk-scotland-scotland-business-64634649

Disrupting the cyber divide between the North and South

Innovative cyber security experts from three regions have joined forces in the North to address the lack of investment and development. Cyber security is a necessity across every business and the high-growth sector is on an upward trajectory with annual cyber security revenue in the UK now estimated at a huge £10.1 billion, an increase of 14% in the last year alone. However, when it comes to the North/South divide the statistics are a cybercrime in themselves with recent statistics citing cyber security investment in the southern regions accumulated to £982.4 million, falling very short was the Northern regions with just £8 million investment.  With a clear mission to facilitate and level up the divide three cyber security clusters in the North – North West Cyber Security Cluster, Yorkshire Cyber Security Cluster and CyberNorth have come together with UKC3 in commissioning the Northern Cyber Clusters Collaboration project, with the aim to better understand cyber security assets and key cyber security players in the Northern regions, and to develop ways for them to work together to increase visibility and to elevate growth and opportunities in the sector. 

UKHospitality Scotland responds to new flexible planning rules

The Scottish Government has announced that hospitality businesses will be able to place tables and chairs outside their premises without a planning application. They have also backed the relaxation of planning rules for conversions of certain premises into some hospitality venues. Business leaders have welcomed the relaxation of the rules – which is likely to be approved by MSPs – with the Scottish Retail Consortium saying it could “give people a little more reason to spend time and money on our high streets”. Other measures likely from March 31 include a relaxation of planning rules for converting some properties into cafes, restaurants or small-scale offices, along with measures to make the installation of larger electric-vehicle charging equipment in car parks easier. But councils will retain powers to prevent and deal with obstructions which make it difficult for people such as wheelchair users or families with young children in pushchairs to access pavements safely. Responding to this announcement, UKHospitality Executive Director Leon Thompson said: “This news will be a significant boost for Scottish hospitality businesses who are keen to offer customers the best experience possible but have often been held back by restrictive planning regulations.