Bank of England offers EU investment banks easy access to city after Brexit

Yesterday, in a move to maintain London's status as a global financial centre, the bank of England said it would allow EU based investment banks access to the City with 'EU passport' similar to schemes employed by Japan the US.

The Governor of the Bank of England, Mark Carney said the UK's stance of "responsible openness" was dependant on a similar response from the EU. He told the parliamentary committee "Our approach is... best with a high degree of supervisory co-operation. We would hope it's reciprocated. If it's not, there will be consequences."

The Financial Conduct Authority also temporary waivers to be granted to more than 8,000 European banks, insurers and asset managers to allow them to run in the UK as if it were still in the EU.

Phillip Hammond, the chancellor, said the initiatives "will ensure that the UK's exit from the EU is smooth and orderly, will underpin the UK's status as a global financial services sector and will ensure that UK consumers are protected."

The initiatives from the Bank of England stand in contrast to the banks of Paris and Frankfurt who have actively been courting international banks to relocate from London after Brexit.

The new scheme could fend off such moves as it would allow finance to operate in the UK as if it hadn't left the EU.

Source: FT

Household Cost Indices from the ONS Show Retirees Living Standards Improve Whilst Worker's Fall

The Office for National Statistics today released their new Household Costs Indices, a new kind of experimental data that tracks indices for household groups from 2005 to 2017.

Disposable income for those of working age decrease year on year from 2006. Wages during this time grew by 26% whilst costs rose by 27%.

By contrast, retired household's disposable income grew by 49% and living cost 32%.

Although the generational gap grew during this period, poorer household income growth rose. This was particularly apparent in 2015-2016 financial year. However, costs for low income households (the ninth decile in the ONS survey) grew faster than for richer ones.

The report also shows that households without children experienced "stronger rises in prices and costs" than those with children.

The ONS said “given this pattern has only been seen at one time point it is difficult to discern whether this is a trend in the data or a temporary divergence in the figures”.

SNP asked to find extra £150 million in budget or lose Green's support

On Friday evening the Scottish Green Party told Nicola Sturgeon's government that she must find an extra £150 million for funding of Scottish local councils in order to gain the parties support. 

Since the SNP is a minority government, they must gain three votes from another part in order to pass the budget. 

The Greens are seen as the most likely to back the budget, as they supported last year's. However, their support was only won after two-months of negotiations saw the government make concessions totalling £220m of extra spending - including £160m for local authorities.

Green MSP Andy Wightman said "We want a real terms increase (in council budgets) and that would involve somewhere in the region of £150m as I calculate it this morning".

This figure is similar to the £153m that council body Cosla says has been cut from council budgets in real terms, although Mr Wightman said there were "various figures".

In Thursday's budget, a 3% council tax increase was offered to local councils to use if they wish, if they choose to implement the rise, then funding for local authorities could be covered. 

Public-sector trade unions are dismayed that Mackay did not increase funding for Scotland’s 32 councils to allow them to match an offer he made to other civil servants, police and nurses to increase their wages by up to 3%.

Dave Watson, a Scottish official with the public-sector union Unison, said pay policy “was moving in the right direction but it’s not been met with proportionate funding. What is absolutely clear is it is not funded at all for local government.”

Watson said it would cost councils roughly £210m to fund the pay deal, so the £150m extra being demanded by the Greens would be quickly swallowed up.

Negotiations of where the extra £150 million could be found are ongoing, leading to speculation of a further taxation rise. 

Derek McKay advised against 50p top rate of tax by senior government advisor.

A report released by senior advisor to Nicola Sturgeon; Gary Gillespie has recommended against raising the top rate of tax to 50p. 

The report claims that additional rate (AR) tax payers are 'more mobile' and have 'more opportunities for reducing their tax bill compared to taxpayers on lower incomes' meaning that a rise of 5p could lead to capital flight. 

It is estimated that around 20,000 adults in Scotland currently pay the top rate of tax, under 1% of the population, it only applies to earnings over £150,000. Many of those paying AR are involved in mining, professional service and financial services that tend to compete globally for staff, meaning that these higher earners are potentially more mobile. 

The report does concede that there are many factor as to why you might wish to stay in Scotland, including quality of public services, education and culture. Factors that might mitigate against mass migration of top earners. 

It warns that in a worst case scenario raising the top rate of tax to 50p could cost the Scottish Government £24m a year in lost revenues. 

Gillespie said: “However our analysis also notes that a lower increase in the additional rate could mitigate the behavioural response and provide a greater opportunity to raise revenues."

One of the members of the council of economic advisers, top economist Anton Muscatelli, has called for a "slight increase" in taxes for what he describes as “the cost of living in a civilised society”. 

The advice comes the day before the Scottish budget is announced. Nicola Sturgeon has said that 'the time is right' to consider a taxation rise.
Last month the SNP published a “discussion paper” on income tax which set out four scenarios, the first of which proposed raising the higher and additional rates by 1p each.

Reform Scotland, meanwhile, have argued Scotland should not alter its income tax rates from UK levels until other taxes such as VAT and business tax are also devolved.Chairman Alan McFarlane said: 
“Altering the Income Tax rate to make it different from Westminster, far from being beneficial, could be detrimental to Scotland’s economic performance and lead to a drop in revenue available to spend on public services. The Scottish Government has itself acknowledged the potential for adverse behavioural change in response to income tax policies. “We need more tax levers to equip us to introduce coherent reform. There are viable options with precedent, including VAT and Corporation Tax."

The budget will be announced tomorrow at 2pm Thursday the 14th of December.

The Federation of Small Business urge ministers to 'Steady Economic Ship'

In a report published today, the Federation of Small Business (FSB) found that three fifths of businesses don't want the government to change income taxation, with two thirds believing it would be detrimental to the economy. 

The survey conducted this November on 315 Businesses in Scotland, found that 20.7% wanted a decrease in taxation and 21.0% would welcome an increase. 

The poll comes just before the draft budget is announced on Thursday. FBS have written to Cabinet Secretary Derek Mackay with the results, asking for a 'steady economic ship' in times of uncertainty. 

The First Minister has spoken about taxation increases to fund public spending in the last few months, the extent of which will be revealed in Thursday's budget.

Andy Willox, FSB’s Scottish policy convenor, said: “A clear majority of those that run their own business in Scotland don’t want the Finance Secretary to increase income tax rates. Those asked warned of the impact on the wider economy, and little wonder with pressure on household incomes and uncertainties about the impact of Brexit.”

The research from FSB also showed that 68% of businesses are on the basic tax rate, meaning they earn between £11,501 and £43,000.

The government's four alternative approaches include having anything up to six tax bands, while three out of the four feature a 50p additional rate and incremental changes to the basic and higher rates.

The FSB survey found that just under half of business owners preferred the proposal with the largest number of bands and rates.

Andy Wilcox added: “This data scotches the myth that business owners are all high earners. Further, when forced to choose between Ministers’ palette of tax options, the largest share of business owners chose what could be regarded as the more progressive option.

“They seem to be less worried about their own wallets and more concerned about the wider economy.

“That’s why, overall, smaller businesses don’t want to see tax change. As FSB warned ahead of the UK Budget, trading conditions are already turbulent, and additional tax hikes – for them or their customers – are not what we need right now. The Scottish Government must resist the siren song of a big change budget, and do what they can to steady Scotland’s economic ship.”

Source: FBS Scotland

£15 million grants available through 'Tampon Tax' fund

Following legislation from the Westminster government's 2015 Autumn statement, VAT on sanitary wear is now used to provide grants for women's health support and economic development charities. 

There are currently grants of £1 million pounds each available to charities that support women's mental health and wellbeing, as well as organisations that tackle violence against women and girls. 

Tracey Crouch, the minister for civil society said: "The tampon tax fund is already making a real difference to the lives of women and girls across the country. We are ensuring that the money generated from sanitary products continues to support good causes and address the serious issues that women of all ages face."

She also specifically welcomed applications for projects that support women and girls "across multiple regions" of the UK.

The tax has been criticised as it is based on tampons and sanitary towels being classed as 'luxury items', rather than necessary to menstruating women. 

The recipients of funding from the Tampon Tax were also called into question in October when an anti-abortion charity received £250,000 from the government. 

Period poverty has also been highlighted world world as lack of sanitary products can prevent school attendance and negatively impact girls education. 

Applications are open until midnight on Sunday 28 January for projects delivered over either one or two years.

Source: third source news.

Joseph Rowntree Foundation finds an increase in children and pensioners living in poverty

Figures from the think tank show that 300,000 more children and 400,000 more pensioners are now living in poverty than in 2012-13: the first sustained increase in child poverty for 20 years. 

14 million people in the UK currently live in poverty – more than one in five of the population. While poverty levels fell in the years to 2011-12, changes to welfare policy – especially since the 2015 Budget – have seen the numbers creep up again.

The report's release follows the entire social mobility commission quitting over the weekend citing a lack of progress towards a 'fairer Britain'.

Alan Milburn, the government tsar for social mobility said on his resignation that the venture had been rife with “indecision, dysfunctionality and lack of leadership” seeing 'little hope' that Theresa May's government would be able to contribute to a more equal society. 

Frances O'Grady the general secretary of the Trade Unions Congress said: “Working people are not getting a fair deal from the economy, with real wages still worth less than a decade ago.” She called for a minimum wage of £10 an hour.

JRF chief executive Campbell Robb said: “These worrying figures suggest that we are at a turning point in our fight against poverty. Political choices, wage stagnation and economic uncertainty mean that hundreds of thousands more people are now struggling to make ends meet.”

Oxfam’s Rachael Orr said: “It’s not just working adults who are affected, but their children too, and it’s a real worry to see progress on child poverty going into reverse.”

Chief executive of the Child Poverty Action Group Alison Garnham added: “As today’s report shows, we know how to reduce child poverty in the UK – we’ve done it before. Yet at the start of a sustained rise in the rate of child poverty – bewilderingly – there is inaction. The question the report begs is why are we not investing in our children?

“Families with children have had a decade of cuts to their incomes and the damage is showing. Unless there is action now to protect the living standards of low-income families, we will pile up problems for future generations and for the UK economy.”

Source: Joesph Rowntree Foundation. 

Report reveals lack of social mobility between Scottish boroughs

A study released by the UK Social Mobility Commission has revealed discrepancies between the services of local authorities. There is a gulf between what different councils are able to provide to tackle the attainment gap that impacts upon what sort of life young people could lead.

The level of literacy and numeracy differs by as much as a third between the wealthiest and most deprived countries. 

Using controversial new Scottish Government data, the SMC report ranks local authorities by the average gap in reading and writing attainment in P1, P7 and S3. At P1, the deprivation gap in the proportion of pupils reaching the expected level was almost 34% in Highland, the worst-performing area. At P7, Aberdeenshire came bottom of the table, with an attainment gap of over 40%. And Aberdeenshire saw the biggest difference between the best and worst-off pupils at S3, of 40%.

UK wide it was found that the worst performing areas for social mobility are no longer inner city areas, but remote rural and coastal areas, and former industrial areas, especially in the Midlands. Young people from disadvantaged backgrounds living in these areas face far higher barriers than young people growing up in cities and their surrounding areas - and in their working lives, face lower rates of pay; fewer top jobs; and travelling to work times of nearly four times more than that of urban residents.

The Rt Hon Alan Milburn, chair of the Social Mobility Commission, said:

'The country seems to be in the grip of a self-reinforcing spiral of ever-growing division. That takes a spatial form, not just a social one. There is a stark social mobility lottery in Britain today.

London and its hinterland are increasingly looking like a different country from the rest of Britain. It is moving ahead as are many of our country’s great cities. But too many rural and coastal areas and the towns of Britain’s old industrial heartlands are being left behind economically and hollowed out socially.

Tinkering around the edges will not do the trick. The analysis in this report substantiates the sense of political alienation and social resentment that so many parts of Britain feel. A new level of effort is needed to tackle the phenomenon of left behind Britain. Overcoming the divisions that exist in Britain requires far more ambition and far bigger scale. A less divided Britain will require a more redistributive approach to spreading education, employment and housing prospects across our country.'

Source: gov.uk

OECD downgrades UK's Growth Forecast making it the weakest of the G7 countries

The Parisian based think thank the Organisation for Economic Co-operation and Development, today released it's predictions for the UK's growth. It forecast Britain's economic growth to drop from 1.5% in 2017 to 1.2% in 2018 and 1.1% in 2019.

The OECD’s forecast for 2018 and 2019 is well below the downgraded estimate issued by the Office for Budget Responsibility alongside chancellor Philip Hammond’s Budget last week, and highlights how the organisation believes Brexit will weigh heavily on Britain’s economic performance.

The OECD's report published in September put Britain at just 1% in 2019, the rise is attributed to the interim deal that is currently being negotiated. In today's report, Britain leaving the EU is described as a significant risk for economic prospects in Germany, Ireland, Latvia, the Netherlands, South Africa and Spain. 

Figures for the global growth in the OECD report are 3.6% this year and 3.7% in 2018, putting the UK well behind the global level led by China and India. 

José Angel Gurría, the OECD general secretary, said: “Growth has picked up momentum and the short-term outlook is positive, but there are still clear weaknesses and vulnerabilities.

“There is a need to focus structural and fiscal action on boosting long-term potential as monetary policy support is reduced. Countries should implement reform packages that catalyse the private sector to promote productivity, higher wages and more inclusive growth.”

Fraser of Allander Institute and Scottish Centre for Employment Report on Scottish Labour Market Trends

The Fraser of Allander Institute and Scottish Centre for Employment has released their report on Scottish labour market trends. 

The Fraser of Allander Institute is a leading economic research institute with over 40 years of experience researching, analysing and commentating on the Scottish economy. The FAI undertakes a unique blend of cutting-edge academic research alongside applied commissioned economic consultancy in partnership with business, local and national government and the third sector. 

The report shows that Scotland’s labour market remains strong, in absolute terms and relative to the rest of the U.K., with a slightly lower unemployment and a higher employment rate. Scotland continues to have the best employment rate outside of the East and South of England with a record high of 75.2% employment and unemployment remaining low at 4.0%.

Much of the increase in employment comes from self employment. The nature of this work is predominantly unknown, whether a move to increase work flexibility and potential earnings or a result of not being able to find employment and so becoming precariously self employed. The kind of work being undertaken will have an impact on the amount of tax revenue generated by this upturn in self employment. 

Self employment has risen particularly in women since 2008, perhaps indicating that child care is a motivation in the increase. In terms of age, the largest increase in employment since 2008 has been in the 65+ demographic, 25-34 and 35-49 are also back at pre-2008 levels of employment. 

Trends in youth labour market of 16-24 show employment at a record low, however this could in part be due to employment inactivity indicating an uptake in full time education between these years.Productivity remains sluggish, as a result of which real earnings once adjusted for inflation are also subdued. 

You can read the full report here as well as John Sutherland looking in more detail at firm’s workplace adjustment strategies during the Great Recession with insights from the Workplace Employment Relations. John is an Honorary Research Fellow at the Scottish Centre for Employment Research (SCER) in the Department of Human Resource Management at the University of Strathclyde.

Health and Social care now the biggest employer in Scotland

A new Scottish Parliament Information Centre (SPICe) report shows that most people in Scotland are now employed by the NHS or local councils. Health and social care now accounts for 16% of jobs in Scotland, and is likely to continue to rise as the population ages. 

This marks a shift from traditional occupations. Ewan Gibbs, a historical political economy researcher at the University of the West of Scotland, said the 21st century workforce was largely unrecognisible compared with that of 50 or 60 years ago “There were over 250,000 Scots employed in coal mining, steelmaking, shipbuilding and related heavy engineering in 1958 and comparative figures now will be highly negligible,” he said. “Shipbuilding is largely a defence operation now. Steel is restricted to speciality and refinement with no basic production. Coal has essentially disappeared.” 

He continued: “A key point to make would be that process of erosion didn’t all happen in the 1980s. For instance, more coal jobs were actually lost in the 1960s – but at that point they were managed through industrial diversification policies that brought alternative forms of employment in assembly engineering activities.”

The changes in industry and agriculture are in line with other similar economies. The retail sector has also decreased, as more people shop online. 

Of those in employment, 4% were self employed, 32% part time employed and 64% in full time jobs. This shows a 1% increase in part time employment with 70,000 more people now working part time. 

Source: https://digitalpublications.parliament.scot/ResearchBriefings/Report/2017/10/13/Scotland-s-Employment-by-Industry-and-Geography#Full-time-and-part-time-trends

UK Employment Figures Fall

Employment in the UK has fallen for the first time in two years. The number of unemployed people went up by 14,000 in the summer quarter according to the Office for National Statistics. The inactivity rate: measuring those who are not employed and are not seeking work, rose to an eight year high. The highest rates of inactivity were amongst 18-24 year olds suggesting that young people are leaving work for further education. 

There is speculation that the impact of Brexit is being felt, with figures being released yesterday that show the UK economy growing at half the rate of Germany's. 


Howard Archer, an economist with EY Item Club, a forecasting body said; “A fall in employment over the quarter suggests that persistent lacklustre economic growth and appreciable economic and Brexit uncertainties may be starting to rein in the labour market’s strength,”  

The ONS said the unemployment rate held at a four-decade low of 4.3 percent but that pay growth -- which would usually be expected to rise with so many people in work -- remained much slower than inflation.



Further evidence of a weaker labour market came from a fall in job vacancies, a 29,000 decline in the number of full-time jobs and an increase in the number of part-time workers saying that they would like to have full-time employment.

The report comes one week before Phillip Hammond set the budget for the UK. 

Inequality is rising as report finds that richest 1% own half the world's wealth

A report published this morning by Credit Suisse has found that 1% of the world's population own 50.1% of the world's wealth. 

The report looks at where we are ten years on from the financial crisis, it shows that total global wealth is 27% higher today than it was in 2007 before the financial crisis. It also shows that the number of millionaires has increased by 8,740,000 since 2007 leading to one of the largestest outcomes of the financial crisis to be an increase in inequality. 

It says:

'The remaining negative heritage of the financial crisis is wealth inequality. It has been rising in all parts of the world since 2007. As calculated by the report authors, the top 1 percent of global wealth holders started the millennium with 45.5 percent of all household wealth, but their share has since increased to a level of 50.1 percent today.'

'The outlook for the millionaire segment is more optimistic than for the bottom of the wealth pyramid (less than 10,000 dollars per adult). The former is expected to rise by 22 percent, from 36 million people today to 44 million in 2022, while the group occupying the lowest tier of the pyramid is expected to shrink by only 4 percent.'

Oxfam said Credit Suisse’s research showed that politicians need to do more to tackle the “huge gulf between the haves and the have-nots”. 

“In the UK, the wealthiest 1% have seen their share increase to nearly a quarter of all the country’s wealth, while the poorest half have less than 5%,” Oxfam’s head of advocacy, Katy Chakrabortty, said. “This divide matters hugely at a time when millions of people across the UK face a daily struggle to make ends meet and the numbers living in poverty are the highest for almost 20 years. 

“The recent Paradise Papers revelations laid bare one of the main drivers of inequality – tax-dodging by rich individuals and multinationals. Governments should act to tackle extreme inequality that is undermining economies around the world, dividing societies and making it harder than ever for the poorest to improve their lives. 

“In the UK, the chancellor should use next week’s budget to prioritise tough action to tackle tax avoidance to help provide funds to fight poverty in both the UK and developing countries.”

Source: https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/global-wealth-report-2017-201711.html?aa_cmp=socm_hrcb_glob_17.11.14_ca1613_pr005_ag01_bt01_cf35_eng_me00296

The Pound Falls against Dollar and Euro over governmental instability.

The pound has fallen this morning as pressure mounts on prime minister Theresa May over Britain's exit from the EU. Talks from both Micheal Barnier and Brexitiers in the cabinet have lead to a shock for the British market. 

Sterling has lost almost a cent this morning, to below $1.31. This follows yesterday's report in the Sunday Times that 40 Conservative members of Parliament have agreed to sign a letter of no confidence in Theresa May.

Forty eight is the number needed to launch a leadership challenge, creating new worries in the City and beyond about the stability of the UK government.

In another significant move, foreign secretary Boris Johnson and environment secretary Michael Gove have written a letter to May complaining that “some parts of Government” aren’t doing enough to prepare for a hard Brexit.

This letter, which leaked over the weekend, appears to be an attempt to undermine chancellor Philip Hammond (as he puts the finishing touches to next week’s budget).

One minister has described the move as “Orwellian”, suggesting that the cabinet is badly split as MPs return to parliament to debate the Brexit bill.

Rajeev Syal and Jon Henley reported in the Guardian that :

'Another minister said' “I doubt they thought this would ever come out. It stinks to high heaven. May will have to dress them down or look weak.”

“I can’t believe this has come out. This is exactly the kind of arm-twisting by Brexiters one expects to go on behind the scenes, but the fact that it is in the public and is being inflicted upon the prime minister is remarkable.”

Kathleen Brooks of City index writes: 

'Firstly, today’s move tells us that the markets are on alert for political risks emanating out of the UK, and if there is a party coup to replace Theresa May then political turbulence is likely to weigh on the pound further.

Secondly, even though the pound has had a jolty start to the week, volatility and technical signals do not suggest to us that the pound is about to fall off a cliff just yet, we may need this story to develop further to get another big move lower in sterling. 

Thirdly, don’t get too complacent about the pound, the political and Brexit situations remain fluid and can throw up surprises. In future, when volatility is low in the pound investors should be on their guard that a pullback is likely. '

Source: Guardian/ City Index

EU calls for Ireland to remain in Single Market and Customs Union to avoid hard border.

A working paper has been published by the EU requesting that the Island of Ireland remains within the single market and customs union.

The paper says that in order to avoid a hard border it is essential that there is no difference in rules for either side of the border. 

It also explicitly spells out the fact that to avoid a hard border will take more than technical arrangements as favoured by the British Government: NI must be within the single market. 

The question of protecting the Good Friday agreement is also addressed; Both the UK and the EU named this as a priority. 

The Irish Foreign Affairs Minister, Simon Coveney, said that talk of individual countries vetoing a move to the next stage of negotiations is "unhelpful" but progress still had to be made on the border issue.

"I think that there is a way to go between the two negotiating teams to be able to provide credible answers and sufficient progress in the context of the Irish border before we can move on to Phase Two," he told Irish state broadcaster, RTE. 

A spokesman for the UK's department for leaving the EU said that the government is committed to avoiding a hard border. 

"We recognise that the solutions to the unique circumstances in Northern Ireland must respect the integrity of the EU single market and customs union.

"But they must also respect the integrity of the United Kingdom."

"The government is determined to find specific solutions to Northern Ireland's unique circumstances, not least as the only part of the UK to share a land border with an EU member state."

The Commission document will place more pressure on the Conservative government given its reliance on the DUP for survival.

Northern Ireland remaining inside the customs union and single market, while the rest of the UK was outside, would impose an entirely new structure on the United Kingdom.

source: https://static.rasset.ie/documents/news/2017/11/eu-paper.pdf
BBC

Paradise Papers

Leaked documents of 13.4m files from two offshore service providers and 19 tax havens' company registries know as the paradise papers have been released, revealing how much wealth is stored off shore to avoid tax. 

Amongst the offshore wealth is 10 Million pounds worth of investment made on behalf of the Queen by the Duchy of Lancaster. Some of this investment was in Bright House, a company that charges high rates of interest on household goods for those who cannot afford to buy them outright. Last week Bright House was ordered to pay back £14.8m to its customers last week after the Financial Conduct Authority said it had not acted as a “responsible leader”.

Apple was also found to have moved parts of it's operation to Jersey, to avoid tax on $252bn. This move was after Apple came under scrutiny for their previous Irish tax avoidance system.

Conservative donor Lord Ashcroft is also under investigation for using an offshore trust to shelter wealth. With 13.4 million files, many more tax avoidance schemes are sure to continue to come to light. 

After the revelations, the Labour leader, Jeremy Corbyn, appeared to suggest the Queen should apologise. “Anyone that is putting money into tax havens in order to avoid taxation in Britain, and obviously investigations have to take place, should do two things – not just apologise for it but also recognise what it does to our society,” said Corbyn.

Theresa May said that ‘HMRC is already able to see more information about the ownership of shell companies for example so they can ensure that people are paying their tax.’ 

Job Opportunities at The Federation of Small Business

FSB are looking to recruit two development managers and an operational support co-coordinator. 

FSB are experts in business, offering services including advice, financial expertise, support and a powerful voice in government. Their mission is to help small business achieve their ambitions. 

If this sounds like to place for you, check out the job descriptions below and apply!

http://www.fsb.org.uk/about-us/careers/career-opportunities/development-manager

http://www.fsb.org.uk/about-us/careers/career-opportunities/development-manager-2

 http://www.fsb.org.uk/about-us/careers/career-opportunities/operational-support-co-ordinator

Managing People for Work Place Innovation Master Class

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Almost Half of Scottish Over 40s Unable to Afford Retirement

Research by YouGov commissioned by Age Scotland and Business in Community has found that 43% of Scots age 40-64 will not have enough money to retire by state pension age.  
44% of those survey said they would work until their late 60s to afford their retirement. 36% of those planned to continue in their current job at full time hours, while 25% wish to move to part time in later years. 24% of those looking to reduce their hours wished to do so because their job would be too physically demanding while 18% said their health wouldn't be good enough.


However, 22% of those surveyed said that they would miss the social side of work so would continue for this reason. 

Chief executive Brian Sloan said: "It's worrying that retirement seems increasingly unaffordable for a growing number of Scots.

"While there are various reasons people choose to keep working, money concerns are the main factor forcing them to work into their late 60s and beyond. At the same time, many feel they will need to reduce their hours or switch to a less physically demanding job.

"Of course many people choose to stay on at work because they enjoy the social side or want to share their skills. Yet instead of an ageing workforce being seen as a valuable asset, too many older workers continue to face negative perceptions or age discrimination.

"There is a growing need for more guidance to help people plan their future working life and prepare ahead for retirement. We're pleased that most Scots support our plan for a 'career MOT at 50' to enable them to make informed choices about training, pension provision and future career options.

"As the state pension age increases, working longer is set to become part of life. We're urging the Scottish Government to continue to invest in our older workers, tackle barriers to working, and offer mid-career guidance to everyone who requires it.'

Source: Age Scotland/ YouGov

Inflation Rises to Five Year High

Inflation increased to three percent in September, the highest in five years. 
The Resolution Foundation have warned that this rise will hit low and middle income families standard of living; a working family with two children could lose  up to £315 pounds a year. 

Food and transport are the main drivers of rising costs  rising by 0.8% since last year. Benefits are currently frozen for the next four years, so an increase in inflation could hit recipients very hard.

The Institute for Fiscal Studies said the figure highlighted the risk of setting benefits rates far in advance, with recipients set to lose out as an unintended consequence.

A spokesperson said:

“This morning’s inflation figure, taken together with the latest inflation forecasts, means that the four-year freeze on most working-age benefits is now expected to cut the benefits of 10 million families by £450 a year in real terms – up from £320 back when the freeze was first announced. The extra £130 loss is not the result of any deliberate decision by the government – it is the consequence of inflation being higher than was expected when the policy was set.”

Scottish Chambers of Commerce CEO Liz Cameron said: “The figures today continue to highlight the divergence between cost of living and real wages which characterises the fragility of the UK economy.  

“Speculation continues to increase around the prospect of an interest rates rise in November, yet the inflation figures emphasise the uncertainty this would cause to both Scottish business and the UK economy as a whole.

“In the current climate, while real wages are falling, the MPC should continue to hold steady on interest rates.

“It is critical that the measures provided in the Chancellor’s upcoming Autumn Budget are clearly designed to boost business confidence and increase investment. 

“Ensuring a stable environment for business growth will contribute to rising wages, and a subsequent rise in consumer confidence.”

Source: Holyrood 

Centre for Local Economic Strategies publishes Post Brexit Procurement Policy Framework

Centre for Local Economic Strategies publishes Post Brexit Procurement Policy Framework

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October 16, 2017

The Centre for Local Economic Strategies has published a study that recommends progressive procurement policy for a post brexit environment. 

CLES has been working for 10 years on a study that looks at how "anchor institutions purchase goods and services can bring direct benefits for local business and organisations and indirect benefits for the local economy, social economy and people". 

There are currently three governing principles that are followed as standard practice: 

1. ensuring competition in the process and the movement of goods and services across borders;

2. ensuring procurement is undertaken in a legally compliant and risk averse way; and

3. ensuring procurement is undertaken in an efficient manner, with cost the predominant decision-making criteria.

To this CLED suggests adding three further principles to ensure more sustainable procurement:

1. The Directives talk about the importance of flexibility in procurement so that processes are more reflective of the nature of the good and service being procured and its value, thus making it simpler.

2. They talk about the importance of Small to Medium Sized Enterprises (SMEs) to national economies and the need to procure more of them.

3. And they talk about the need for the process of procurement to be linked to and address wider social and environmental goals.

CLES also set out a best practice guide for how to best implement post-brexit procurement.  They see Brexit as a "significant opportunity for UK Government and place based anchor institutions to re-shape legislation around public procurement and in turn how procurement is undertaken in policy, strategy and practice terms."

You can read the full report and recommendations here. 

Source: CLES 

£6 Million pound fund announced for rural tourism infrastructure.

A six million pound investment in rural infrastructure has been announced by the Scottish government. The boost comes as record tourist numbers have been seen in the UK over the last year. The money will go towards improving parking, recycling points, campsite facilities and footpath access. 

The fund will be launched in 2018 and be administered by local councils and public sector partners. 

First Minister Nicola Sturgeon said: “The tourist boom that our country is enjoying is great news. It means more jobs and investment but it can also mean pressure on transport, services and facilities – especially in rural areas. The Scottish Government is determined to help.

“Our new £6 million Rural Tourism Infrastructure Fund will take bids from communities and work with local councils to support projects that enable even more people to enjoy Scotland, the most beautiful country in the world.”

Source: Holyrood.com 

“Brexit: What’s at Stake for Businesses”

A new report published by the Scottish government details how uncertainty is impacting companies. The report is published just as Theresa May failed to assure EU citizen's rights in the case of a no deal Brexit. 

Businesses believe that Brexit may impact recruitment, and hinder future growth. The report uses business leader's own words and focuses on issues such as:

• Glasgow Airport's possible loss of the legal framework to fly its current EU routes and some long-haul, including to the US and Canada

• Loch Melfort Hotel, Argyll worries about the difficulty of having to attract and retain staff.

• The Scottish Salmon Company with 60 sites, employing more than 500 people – on importance of remaining in the Single Market to allow trade relationships to grow

Minister for UK Negotiations on Scotland's Place in Europe Michael Russell said:

"This report articulates the concerns of Scottish businesses as the Brexit clock ticks towards the UK’s departure from the EU. It is clear that there is a great deal at stake for every business. Their voices must be listened to before irreversible decisions are taken.”

Founder and Creative Director of Maramedia Nigel Pope said:

“I’m delighted to see the publication of this report. As a producer of international wildlife programming with global relationships it’s essential that our business retains access to the Single Market for future growth.”

Amanda McMillan, Managing Director of Glasgow Airport said:

“The uncertainty regarding the UK’s future trading relationship with the EU is already having an impact on the aviation industry. A number of airlines have stated they will scale back their UK growth plans, focusing instead on adding capacity at airports in the EU. This has the potential to undermine Scotland’s connectivity.”

Source: Scottish Government report. 

Job creation for inclusive growth in cities

Joseph Rowntree has published a report that identifies 'more and better jobs' in UK cities. 

The report shows:

• There is a significant shortfall in labour demand in 12 major UK cities.

• Local industrial strategies can raise labour demand in cities and can complement supply-side policies.

• Policy interventions should be based on clear and robust aims and rationales, and careful coordination with supply-side initiatives.

• The priorities for demand-side policies are:
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• Identifying and targeting inclusive growth sectors, fostering demand-led skills development, building closer employer engagement and partnership focused on priority sectors.

• Lobbying for greater devolved powers, and strengthening policy analysis and evaluation frameworks.

Joseph Roundtree Foundation find freeze on benefits 'single biggest policy driver' behind expected rise in poverty

The Joseph Roundtree Foundation has released research that shows that almost half a million more people would be forced into poverty over the next three years if the proposed freeze on benefits goes ahead. 

A new briefing by JRF published yesterday highlights how the freeze makes families worse off - the majority of whom are in work. The freeze is the single biggest policy driver behind the expected rise in poverty by the end of the Parliament.

JRF is calling for the Government to target its resources better at struggling families. Rather than increase the personal tax allowance to £12,500, which would overwhelmingly benefit better off families, JRF is urging the Government to remove the benefits freeze. Only £1 in every £6 spent on raising the personal tax allowance goes to the bottom half of the income distribution.

The influential thinktank say that the hit on families is set to be just under £1bn more than the £4bn initially forecast, due to prices rising quicker than expected.

They found the plans, which were drawn up while George Osborne was Chancellor, will lead to 470,000 more people living in poverty by 2020/21.

They say that in 2019/20, when the freeze is set to end, a couple with two children receiving the soon to be rolled out Universal Credit will be £832 worse off a year than they would have been had benefits risen in line with inflation since 2010.

They say that boosting income related benefits with inflation in 2018/19, at a cost of £2.8bn, would instead result in 380,000 fewer people living in poverty in 2020/21 - nine in 10 of whom would be in families with children and 17 in 20 would be working families.

Chief Executive of the foundation, Campbell Robb said: 

“People who are just managing at best are being hit in the pocket by the freeze on benefits and tax credits. It means millions of families are finding life even harder to make ends meet - whether paying for the weekly food shop, covering energy bills or finding enough money to pay the rent.

“While the Treasury gains from this policy in the short-term, more children living in poverty has costs the Exchequer an estimated £6.4bn per year in lost tax revenue and additional benefit spending.

“The focus should be on making sure low-income family budgets keep pace with the cost of essentials, while reducing the benefit bill through increasing employment and enabling people on low pay to increase their earnings.

“No government wants to fight an election on a record of rising poverty and falling living standards. Circumstances have changed, so policy needs to change too. As prices rise, the priority should be to protect the budgets of the lowest income families. It’s time to lift the freeze.”

Source: Joseph Roundtree Foundation/ Holyrood.com