Business News Round Up (14/03/2023)

Positive indications for UK economy, but small businesses remain cautious

Small business concerns over economic uncertainty have sky-rocketed over the last 12 months by almost 50%, according to new research from Novuna Business Finance. The latest tracking data from its Business Barometer study revealed the percentage of small business owners worried about market volatility has risen from 27% in Q1 2022 to 40% this quarter – becoming the number one concern in small businesses, replacing the long-term economic impact of Covid as their top worry. With the headline inflation figure falling to 10.1% last month – Novuna’s quarterly poll of 1,106 small business owners suggested that 79% of small business owners were kept awake by issues that were a major source of worry. Along with the legacy of Covid-19, the long-term impact of Brexit had fallen as a worry since this time last year (18%). Instead, concern has risen on the financial aspects of running a business – such as managing cash flow (19%), retaining business (21%) and the prospect of rising tax and interest rates (22%). By sector, the story was more varied. Nine in ten small business owners in the manufacturing and retail sector were tossing and turning at night over pressing business concerns (91%), compared to three quarters nationally (79%). This was a drastic increase on this time last year, catapulting from 78% to 91% in manufacturing and 76% to 91% in retail.

Hunt unveils investment zones to drive growth

Chancellor Jeremy Hunt has confirmed plans for 12 investment zones with specific tax and regulatory rules intended to drive economic growth. Eight locations in England have been named and the UK Government is working with the devolved administrations to establish four more in Scotland, Wales and Northern Ireland. Mr Hunt’s programme is a scaled-back version of a policy announced under former prime minister Liz Truss who wanted the zones to drive growth by cutting red tape, including planning regulation, and offering time-limited tax incentives. The Treasury confirmed that each zone will be backed with £80m. They will be clustered around a university or other research institution, bringing growth to areas which have traditionally underperformed economically. In addition, Mr Hunt will set out plans to accelerate the growth of “high-potential innovation clusters” in Glasgow, Greater Manchester and the West Midlands which will share £100 million of investment in 26 “transformative” R&D projects. They include a net zero project led by the University of Strathclyde to accelerate the adoption of automated ultrasonic inspection during welding and additive manufacturing.

https://dailybusinessgroup.co.uk/2023/03/hunt-unveils-investment-zones-to-drive-growth/

UK job vacancies fall for eighth time in a row

Job vacancies in the UK have fallen for the eighth time in a row as companies blamed economic pressures for holding back on hiring new staff. The official figures come a day ahead of Wednesday’s Budget when the chancellor is expected to set out plans to encourage people back into work. The number of jobs on offer between December and February fell by 51,000 compared with the three months before. Despite the drop, the number of job vacancies remains high at 1.1 million. There are also 328,000 more vacancies compared to the pre-pandemic period of between January and March 2020. The rate of economic inactivity – people aged between 16 to 64 who are not in work and not seeking a job – dipped to 21.3% between November and January. This was driven by younger people aged between 16 to 24 either getting jobs or looking for work. However, there are still nine million economically inactive Britons who are not part of the workforce either because they are students, have retired or are suffering from long-term illness.

https://www.bbc.co.uk/news/business-64939336

Scottish businesses call for stability over corporation tax reduction

Businesses in Scotland want the Chancellor to announce no further tax changes until 2026 at the Spring Budget, according to a new poll from accountancy and business advisory firm BDO. In its pre-Budget survey of businesses and private clients, 46% of respondents called for no tax changes to be announced at next week’s Budget. This contrasts with the rest of the UK, where 48% of businesses favoured a corporation tax reduction plan over the next five years. In Scotland, only 29% believe a reduction of corporation tax is the top priority, while only 16% thought that further business rate subsidies should be the priority. When asked which taxes should rise to pay for tax cuts elsewhere, the most popular choice selected by nearly half (46%) of respondents in Scotland was a properly targeted windfall tax on energy companies. This came ahead of taxes on personal wealth (21%) and green taxes (8%). Meanwhile 25% of those surveyed said no taxes should rise and none should be cut. The survey also sought to canvas business views on the ways the Chancellor could attract more of the ‘economically inactive’ – and particularly the retired – back into the workforce. According to Government figures, there are currently 6.6m people of working age who are currently neither in full-time education nor employment. In total, 45% of respondents favoured cutting the rate of National Insurance Contributions for both the returning employee and their employer and another third suggested enhancing state pensions for those who work beyond their 30 qualifying years.