June 2022 / United Kingdom

June 23 2022

Government acts to make it easier for businesses to use temporary staff to help ease disruptions caused by strike action

New law to allow businesses to supply skilled agency workers to plug staffing gaps during industrial action.

  • Government acts to help reduce disruption from strike action by removing the restrictions on employment businesses supplying temporary workers to cover striking staff
  • companies will have the freedom to fill vital roles more easily so that peoples’ daily lives remain uninterrupted
  • in addition, the government has also raised the damages cap businesses can claim against a union when a court finds a strike is unlawful

A change in the law enabling businesses to supply skilled agency workers to plug staffing gaps during industrial action has been unveiled by the government today (Thursday 23 June).

Under current trade union laws employment businesses are restricted from supplying temporary agency workers to fill duties by employees who are taking part in strikes. This can have a disproportionate impact, including on important public services, causing severe disruption to the UK economy and society – from preventing people from getting to work to creating challenges for how businesses manage their workforce.

Today’s legislation, repealing these burdensome legal restrictions, will give businesses impacted by strike action the freedom to tap into the services of employment businesses who can provide skilled, temporary agency staff at short notice to temporarily cover essential roles for the duration of the strike.

Removing these regulations will give employers more flexibility but businesses will still need to comply with broader health and safety rules that keep both employees and the public safe. It would be their responsibility to hire cover workers with the necessary skills and/or qualifications to meet those obligations.

It would also help mitigate against the impact of future strikes, such as those seen on our railways this week, by allowing trained, temporary workers to carry out crucial roles to keep trains moving. For instance, skilled temporary workers would be able to fill vacant positions such as train dispatchers, who perform vital tasks such as giving train drivers the signal they are safe to proceed and making sure train doors aren’t obstructed.

During this week’s strikes, that role has had to be carried out by train managers who could have been better used in more safety critical roles, such as guards. This legislation would allow that, as well limiting the impact future strikes have on hardworking commuters and the economy.

The change in law, which will apply across all sectors, is designed to minimise the negative and unfair impact of strikes on the British public by ensuring that businesses and services can continue operating. For example, strikes in public services such as education can often mean parents have to stay at home with their children rather than go to work, or rail sector strikes stopping commuters getting to work or to other businesses.

Subject to parliamentary approval, these changes are made through a statutory instrument and are set to come into force over the coming weeks and will apply across England, Scotland and Wales.

Business Secretary Kwasi Kwarteng said:

Once again trade unions are holding the country to ransom by grinding crucial public services and businesses to a halt. The situation we are in is not sustainable.

Repealing these 1970s-era restrictions will give businesses freedom to access fully skilled staff at speed, all while allowing people to get on with their lives uninterrupted to help keep the economy ticking.

Transport Secretary Grant Shapps said:

Despite the best efforts of militant union leaders to bring our country to a standstill, it’s clear this week’s strikes did not have the desired impact due to more people being able to work from home. However, far too many hard working families and businesses were unfairly affected by union’s refusal to modernise.

Reforms such as this legislation are vital and will ensure any future strikes will cause even less disruption and allow adaptable, flexible, fully skilled staff to continue working throughout.

The government has also announced today that it is raising the maximum damages that courts can award against a union, when strike action has been found by the court to be unlawful. The caps on damages, which have not been changed since 1982, will be increased. For the biggest unions, the maximum award will rise from £250,000 to £1 million.

June 21 2022

UK launches ambitious trade deal with Gulf nations

Trade Secretary launches free trade negotiations between the UK and the Gulf Cooperation Council, made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

  • Talks kick off in Riyadh to agree trade deal with countries covering £33.1 billion of trade
  • UK food and drink, manufacturing and renewable energy sectors would benefit from new agreement between the UK and the Gulf Cooperation Council
  • Landmark deal would add at least £1.6 billion a year to the UK economy and support new jobs in key industries

Trade Secretary Anne-Marie Trevelyan is launching free trade negotiations today (Wednesday 22 June) between the UK and the Gulf Cooperation Council (GCC), made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.

Equivalent to the UK’s seventh largest export market, the GCC bloc’s demand for international products and services is expected to grow rapidly to £800 billion by 2035, a 35% increase – opening huge new opportunities for UK businesses.

A free trade deal would also open the door to increased investment from the Gulf, supporting and creating jobs across the country.

In a visit to Riyadh, Saudi Arabia, the Secretary of State will meet the GCC Secretary General, Dr Nayef Falah M. Al-Hajraf, and her counterparts from all six GCC countries, to launch talks expected to culminate in a trade deal worth £1.6 billion more a year to the UK economy.

It is the fourth major set of Free Trade Agreement (FTA) negotiations launched by the Trade Secretary this year, following visits to begin talks in India in January, Canada in March, and the launch of negotiations with Mexico last month.

UK Trade Secretary Anne-Marie Trevelyan said:

Today marks the next significant milestone in our 5-star year of trade as we step up the UK’s close relationship with the Gulf. Our current trading relationship was worth £33.1 billion in the last year alone. From our fantastic British food and drink to our outstanding financial services, I’m excited to open up new markets for UK businesses large and small, and supporting the more than ten thousand SMEs already exporting to the region.

This trade deal has the potential to support jobs from Dover to Doha, growing our economy at home, building vital green industries and supplying innovative services to the Gulf.

UK-GCC deal would mean significant benefits for British farmers and producers, as the Gulf is highly dependent on imported food. British food and drink exports to GCC countries were worth £625 million last year, and a deal could significantly reduce or remove tariffs on UK food and drink exports.

Tariffs that could be slashed include cereals, which currently face a tariff of up to 25%; chocolate, up to 15%; baking products, up to 12%; sweet biscuits, up to 10%; and smoked salmon, which has a 5% tariff at present.

With almost £30 billion already invested in each other’s economies, this deal would also help unlock even more opportunities for investment between the UK and GCC countries.

Gulf investments supported over 25,000 UK jobs in 2019 – a number that tripled over the previous decade – and analysis shows the East Midlands, West Midlands, North East and Yorkshire and the Humber will be in line for the greatest proportional gains when the ink dries on a new deal. The deal would also be estimated to boost the economies of Scotland, Wales and Northern Ireland by almost £500 million collectively.

Stephen Phipson, CEO of Make UK, the manufacturers’ organisation, said:

We welcome the launch of free trade negotiations with the Gulf Co-Operation Council, strengthening trade opportunities which will ensure that British manufacturing benefits from future positive flows of goods and services into the Gulf region.

It is also extremely helpful that the UK and GCC are committed to work towards seeking the opportunities from ‘green innovation’, which will bring significant opportunities for Britain’s innovative renewable energy companies which are already leading the way in this area of global concern. We look forward to working with government to make sure manufacturers large and small are able to benefit from the business possibilities this deal will open up.

Around 10,700 small and medium-sized businesses from every UK nation and region exported goods to the GCC in 2020, with SMEs accounting for more than 85% of total UK goods exporters to Qatar, Saudi Arabia and the UAE.

Co-Founder and Director of Spice Kitchen, an SME exporter based in Liverpool, Sanjay Aggarwal said:

We went to Gulfood with DIT on a research mission and from this we know there is a massive market for our products, like our spice tins and single spice blends in the premium gifting space.

It’s so important for our business to be linking with the GCC and enables us to grow rapidly in exciting ways we never thought possible. We are in the process of identifying retailers in the Gulf, including the UAE, Saudi Arabia and Qatar.

A strong trading relationship would allow the UK to play to our strengths as a manufacturing powerhouse and a world leader in technology, cyber, life sciences, creative industries, education, AI, financial services, and renewable energy.

UK businesses in these industries will also play a role in supporting GCC countries as they diversify their economies to move away from a reliance on oil and towards other sectors. The UAE, for example, has set a target of generating 50% of its electricity from renewable sources by 2050. Exports of UK wind turbine parts currently face tariffs of up to 15%.

RenewableUK’s CEO Dan McGrail said:

The global transition to clean energy includes countries throughout the Middle East which are seeking to make the most of their excellent renewable resources such as solar and wind.

As a global leader in wind, marine energy and green hydrogen, we’re perfectly placed to help other countries to accelerate their efforts to decarbonise their energy systems - and to boost our own economy by exporting around the world.

Background:

  • Government analysis shows that a deal with the GCC is expected to increase trade by at least 16%, add at least £1.6 billion a year to the UK economy and contribute an additional £600 million or more to UK workers’ annual wages.
  • There were around 600 GCC-owned businesses in the UK in 2019, supporting over 25,000 jobs – a number that tripled over the previous decade.
  • More than 85% of total UK goods exporters to Qatar, Saudi Arabia and the UAE are SMEs. In 2020, around 10,700 UK SMEs exported goods to the UAE, 5,500 exported to Saudi Arabia and 4,100 exported to Qatar.
  • Consumers in the Gulf have significant purchasing power and huge appetite for UK products and services. For example, Qatar is one of the richest economies in the world, ranking 9th globally with a GDP per capita of $53,804 (£41,912) in 2020.
  • UK firms have at least £13.4 billion invested in GCC economies and GCC firms have £15.7 billion invested in the UK as of 2020.
  • The GCC is equivalent to the UK’s seventh largest export market, and total trade was worth £33.1 billion in 2021.
  • The UK is the second largest services exporter in the world and services exports to the GCC were worth £12.1 billion last year.
  • Tariffs outlined on foods are mostly 5% across the GCC, where in some cases individual countries charge higher tariffs on specific products. Note that tariffs on chocolate does not include products containing alcohol.
  • Source of statistics: ONS UK trade, all partners, seasonally adjusted, Q4 2021; IMF World Economic Outlook April 2022; ONS Business Structural Database (2022) ; ONS Foreign Direct Investment involving UK companies, 2020 ; HMRC trade in goods by business characteristics, 2020 ; HMRC Overseas Trade in Goods statistics, March 2022.
  UK Government News
June 29 2022

VAT Notice 700/22: Making Tax Digital for VAT

This notice gives guidance on the digital record keeping and return requirements for Making Tax Digital for VAT.

Making Tax Digital explained

Making Tax Digital for VAT requires all VAT-registered businesses to keep records digitally and file their VAT Returns using software.

The software businesses use must be capable of:

  • keeping and maintaining the records specified in the regulations
  • preparing VAT Returns using the information maintained in those digital records
  • communicating with HMRC digitally through our Application Programming Interface (API) platform

If your digital records are up to date, the software will be able to collate and prepare your return for you. It will show you the return and ask you:

  • to declare the information is correct
  • confirm you want it submitted to HMRC.

Once you’ve submitted your return, you’ll receive confirmation through your software that it has been received.

This notice provides further details of the Making Tax Digital rules.

Exemptions from Making Tax Digital

You do not need to follow the rules for Making Tax Digital if HMRC is satisfied that:

  • it’s not practical for you to use digital tools to keep your business records or submit your VAT Returns – this may be due to reasons such as age, disability or location
  • you (or your business) are subject to an insolvency procedure
  • your business is run entirely by practising members of a religious society (or order) whose beliefs are incompatible with using electronic communications or keeping electronic records
  • you’re already exempt from filing VAT returns online
Read more at HM Revenue & Customs