Month: May 2023

Plans to reduce costly and time-consuming regulatory burdens on business have been revealed by the Government today [Wednesday 24 May].

A wide range of UK companies, investors and industry experts have been invited to give their views on non-financial reporting regimes, in a new call for evidence that aims to find ways to reduce reporting regulation burdens on businesses so that they can focus on growth.

Non-financial reporting provides valuable information to investors and is a way for companies to tell their ‘story’ beyond financial information. This includes future strategy, and detail on how a wide range of factors may affect the company’s performance, providing insight into the business and culture of the company.

However, companies and investors have been calling for the simplification of these requirements in the wake of the deregulatory opportunities offered by Brexit. Annual reports now run at an average of 200 pages for the largest companies in the UK, creating unnecessary burden for businesses. With this review, the Government will aim to:

• Save businesses time and money with a more streamlined and focused corporate reporting regime
• Ensure company annual reports contain clearer, more useful information, by asking investors what really matters to them
• Make the UK an even more competitive place to do business by placing growth and investment at the heart of reporting requirements

Business Minister Kevin Hollinrake said:

We want to shred unnecessary paperwork so businesses can focus on what’s important to them – growing and making profit.

By seizing on the opportunities of Brexit to streamline our non-financial reporting regime, we’ll make the UK an easier and more competitive place to do business, while delivering on our priority to grow the economy.

As part of this, we will also review the size thresholds that determine some of the information a company needs to produce in their annual report, in particular the definition of micro-enterprises. This threshold, a relic of an EU directive, could be forcing too many of Britain’s smallest businesses to spend time and money preparing information to a level of detail only needed for larger companies, distracting them from focusing on growth and creating jobs.

The call for evidence will end on 16 August. The Government will then use the information collected to develop detailed proposals for public consultation next year.

Subject to the views shared, the Government will then look to legislate for any changes.

This builds on the “Smarter regulation to grow the economy” policy paper (10 May 2023) which set out how the government would improve regulation across the board to reduce burdens and drive economic growth now that the UK has left the European Union.

Our departure from the EU allows us to shape rules and processes so that they work for the UK’s specific circumstances and businesses, including for non-financial reporting, while upholding our strong record on workers’ rights.

Notes to editors:

1. The Call for Evidence has been published on GOV.UK: https://www.gov.uk/government/consultations/smarter-regulation-non-financial-reporting-review-call-for-evidence
2. The intention to conduct this review was announced as part of the response to the Restoring Trust in Audit and Corporate Governance white paper: https://www.gov.uk/government/news/audit-regime-overhaul-to-help-restore-trust-in-big-business
3. The non-financial reporting review will primarily focus on the Companies Act and the disclosure requirements contained within it. Views on wider reporting requirements that sit outside of the Annual Report are also being collected covering gender pay gap and modern slavery reporting.
4. This call for evidence is not seeking views on the policy intention of modern slavery and gender gap reporting, but rather how these reporting requirements fit within wider non-financial reporting frameworks.

• Japanese businesses commit almost £18 billion investment in the UK as PM hosts business reception in Tokyo
• New finance from firms like Marubeni Corporation and Sumitomo Electric Industries set to create high quality jobs in strategic clean-energy industries
• British businesses like Octopus Energy and Mott MacDonald seize opportunities in Japan as UK prepares to join CPTPP

Leading Japanese businesses have committed to invest almost £18 billion in businesses and projects across the UK, generating growth in key sectors, creating high-skilled jobs and driving technology innovation.

The announcement comes as the Prime Minister prepares to host a business reception in Tokyo today [Thursday 18th], where he will welcome the strength of the UK and Japan’s economic relationship and set out the opportunities to go further.

Japan is already our 5th largest investor with £92 billion invested in the UK, and our trade in goods and services was worth £27.7 billion last year – which is likely to be boosted further when the UK joins the regional CPTPP trade bloc. The Prime Minister will thank Japanese CPTPP Minister Goto in person today for Japan’s strong support for the UK’s membership.

The new investments include funding for offshore wind, low carbon hydrogen and other clean energy projects from Marubeni. The leading Japanese trading house has announced its intention to sign an MoU with the government which envisages approximately £10 billion of investment in the UK with its partners over the next 10 years – including in offshore wind in Scotland and green hydrogen projects in Wales and Scotland.

The company is already supporting 500 UK jobs through its subsidiary SmartestEnergy Limited and will collaborate with government to create a substantial number of new green jobs in the UK.

Mitsubishi Estate and Mitsui Fudosan, two of the largest real estate companies in Japan, are also confirming plans to invest £3.5 billion in the UK today. The planned projects will build affordable housing, high quality office space and life-science laboratory in London, which is expected to support thousands of jobs and help to revitalise areas of the capital.

Sumitomo Corporation intends to expand its UK offshore wind projects, leading to a total investment of £4 billion in projects off the coasts of Suffolk and Norfolk alongside its partners. The major investment further solidifies the UK’s status as a clean energy pioneer and supports Government’s ambition to install 50GW of offshore wind capacity by 2030.

Sumitomo Electric Industries has also announced its decision to build a strategically important high voltage cable manufacturing plant in the Scottish Highlands, bringing more than £200m in investment and creating 150 highly=skilled green jobs. This investment will help the UK build resilient supply chains for critical infrastructure such as offshore wind projects and support UK developers to enhance their contribution to UK growth.

The new investment will support growth in some of the UK’s most cutting-edge industries. Toshiba will be expanding operations at their Cambridge Laboratory, for example, which is designing and delivering advanced quantum-safe cryptographic communication solutions – creating more than 30 new jobs initially and investing in excess of £20 million in new technology development.

Prime Minister Rishi Sunak said:

These new investments are a massive vote of confidence in the UK’s dynamic economy, from some of Japan’s top firms.

Working with the Government and British industry they will create the kind of high-quality, reliable jobs and transformative local investment we are delivering around the country.

It’s great to also see leading UK businesses seizing the huge opportunities for growth and collaboration in Japan. As we grow our trade ties further and join the huge regional CPTPP trade bloc, the sky’s the limit for British and Japanese businesses and entrepreneurs.

UK company Octopus Energy is also announcing today its commitment to invest £1.5 billion in the Asia-Pacific energy market by 2027, helping speed up the region’s transition to a cleaner, smarter energy system. Doubling down on its existing Asian headquarters, Octopus will commit £300 million to expand its tech innovation and energy retail hub in Tokyo. This will enable the business to increase its headcount tenfold by 2027, creating 1,000 green jobs for UK and local talent.

As we grow our defence cooperation with Japan, Leonardo UK in partnership with Kawasaki Heavy Industries has been contracted to provide further world-class naval helicopters and Mid Life Upgrade kits for the Japanese Maritime Self-Defence Force, in a deal worth over £150 million in exports.

Building on the UK’s expertise in offshore wind, UK consultancy Mott MacDonald has also secured a major contract to help develop a state-of-the-art offshore wind farm in western Japan that could power more than 175,000 homes with clean energy.

Masumi Kakinoki, CEO of Marubeni Corporation said:

We are thrilled to have forged a robust partnership with the United Kingdom, and we eagerly anticipate collaborating with the UK government to unleash a surge of investment into the nation’s clean energy transition.

This endeavour not only signifies our commitment to the UK’s energy transition, but also reinforces Marubeni’s role as an active participant in the global march towards a sustainable future. We are on the brink of an energy revolution, and it is partnerships like these that will help ensure our shared success.

Greg Jackson, Founder of Octopus Energy Group, said:

International cooperation is the key to creating an energy transition which benefits consumers and economies as well as the climate. Our partnership with Tokyo Gas has grown ever stronger and I’m delighted to be bringing even more investment to Japan and into the UK.

Linking our businesses in Australia, New Zealand and Singapore to the UK and Europe, our operations in Japan have helped create a unique global technology ecosystem benefiting everyone. I’m excited to take it even further with today’s announcement.

Alongside chief executives and CEOs from firms like Nissan, Sumitomo Corporation and Hitachi, the Prime Minister will meet three start-up UK companies at today’s business reception. Winnow, Transreport and Oxentia have just announced new partnerships and offices in Japan, demonstrating the opportunities for growing UK companies to export internationally.

These announcements come as the UK and Japanese governments unveil a new Renewable Energy Partnership which includes building business partnerships to accelerate the deployment of clean energy.

The UK and Japan will take their cooperation on science, technology and innovation to new heights, after agreeing to renew the two countries’ longstanding Science and Technology Agreement for the 21st Century, with a focus on innovation and game-changing new technologies.

The new Implementing Arrangement was signed by UK Science Minister George Freeman and Minister State Minister Nakatani Shinichi from Japan’s Ministry of Economy, Trade and Industry today (Monday 15 May), in Tokyo, and forms the latest part of the UK’s push to take a truly global approach to science and innovation.

The renewed deal opens up more opportunities for close collaboration to bring cutting edge new technologies to market. This could focus on priority areas like semiconductors and clean tech, which will be critical to growing the economy which is one of the Prime Minister’s five key priorities.

UK Minister for Science George Freeman said:

Japan is the world’s third-largest economy and a science and technology powerhouse. They have produced more Nobel Prize laureates than any other Asia-Pacific country. Bringing Japan’s unique strengths even closer together with the UK’s world-class science and research expertise is a massive opportunity for both our countries, to pool our skills and expertise as we tackle some of the biggest challenges facing the world, all whilst growing our economies and creating jobs.

This deal is just another demonstration of the UK’s ambition to become a truly global science superpower, by deepening collaboration on the science and technology of tomorrow with like-minded nations like Japan, as well as the rest of the G7, to secure our collective future, drive economic growth and improve lives.

Over the last week, in Japan, Minister Freeman has been making the case for the world’s leading democracies to work closer together, to ensure that scientific advances deliver security, prosperity, while tackling the key issues facing our planet, from climate change and bio-security through to space sustainability.

The G7 Science and Technology Ministers’ Meeting, hosted in the Japanese city of Sendai in the last few days provided an important platform to demonstrate how the UK’s leadership in science and innovation – as well as that of the world’s other leading free societies – can be used to enforce our shared principles and challenge authoritarian narratives, as well as drive economic growth. The economic benefits that flow from innovation, are what unlocks investment in public services like the NHS, the ability to cut national debt, and what brings down inflation, all of which are key priorities for the Prime Minister in 2023.

The last week has also provided an opportunity to further cement the UK’s close relationship with Japan, visiting researchers at the NanoTerasu synchrotron radiation facility as well as Tokohu University’s disaster science institute, and meeting leaders from Japanese science and tech companies that are heavily involved in the UK.

The UK and Japan share many of the same science and innovation priorities. Japan’s Moonshot R&D Programme includes a focus on quantum, one of the five critical technologies identified in the UK Science and Technology Framework.

Last year, the UK government committed a further £15.5 million investment to the Hyper-Kamiokande (Hyper-K) project, which is a next generation global neutrino experiment in Japan. This 15-storey physics experiment is helping scientists discover more about the fundamental particles that make up the Universe. We have long enjoyed close links in areas like life sciences, space, and through collaborative research projects funded in partnership by UK Research and Innovation (UKRI) and partners like the Japan Science and Technology Agency (JST) and Japan Society for the Promotion of Science (JSPS).

The new arrangements for the UK-Japan Science and Technology Agreement commit both countries to work together on joint R&D programmes, as well as academic and industrial exchange schemes. The two governments will encourage collaboration between UK and Japanese companies, by creating new networking and investment opportunities, and through closer connections between public bodies like UKRI and Japan’s New Energy and Industrial Technology Development Organization (NEDO). The UK and Japan will also work together closely to ensure their science governance and standards are aligned.

The UK Science and Technology Framework sets out the ambition for the UK to be internationally recognised as a tech superpower by 2030. International collaboration is what powers the UK’s global leadership in science and technology. This means it is essential for the UK to collaborate more deeply with other leading nations to tackle the urgent global challenges facing our planet through science and tech. The International Technology Strategy sets out the work being done to build those partnerships, in a way that promotes positive values and boosts security.

• UK kickstarts negotiations on a modern free trade agreement with Switzerland
• Switzerland is the UK’s 10th largest trade partner, with trade worth almost £53 billion
• New deal will reinforce UK’s reputation as a services superpower, after a record high for services exports in 2022

Trade Secretary Kemi Badenoch today [15 May] flies to Switzerland to launch negotiations on a new UK-Switzerland free trade agreement (FTA) to boost trade between the two services superpowers.

Switzerland is one of the wealthiest countries in the world and the UK’s 10th largest trading partner. The two countries are among the world’s leading service economies, exporting almost £15 billion worth of services including financial, professional, legal, and architecture every year.

The current UK-Switzerland FTA is based on an EU-Swiss deal from more than 50 years ago – before the advent of the home computer or the internet – and does not cover services, investment, digital or data. With most of the UK’s services exports to Switzerland delivered electronically – almost 69% in 2020 – both sides are keen to rectify this in upcoming talks.

Business and Trade Secretary Kemi Badenoch said:

As two of the world’s leading service economies, there’s a huge prize on offer to both the UK and Switzerland by updating our trading relationship to reflect the strength of our companies working in areas ranging from finance and legal, to accountancy and architecture.

The UK and Switzerland are natural trading partners and today’s launch will play to our strengths as services superpowers, while also boosting investment in emerging technologies, data innovation, and digital trade.

ONS figures published earlier this year showed UK services exports reaching record highs in 2022, totalling £397 billion – an increase of 20% compared to 2021 in current prices.

The Business and Trade Secretary will launch talks on the new, modernised deal with her counterpart Federal Councillor Guy Parmelin in Bern, the country’s capital city.

During her visit, Badenoch will also go to SIX, the operator of the Swiss Exchange, Europe’s 3rd biggest stock exchange and one of the industry’s most respected post-trade service providers.

Whilst at SIX she will visit the innovation accelerator Tenity where she will meet startups already operational in the UK including Enterprise Bot, Xworks, SmartPurse and Jrny.

A refresh of our trading relationship with Switzerland will add to the UK’s growing armoury of powerful service-focused deals by removing remaining market access barriers, improving regulatory cooperation and enabling UK firms to compete on an equal footing in Switzerland, now and in the future.

Switzerland’s demand for imports is expected to grow in real terms by 78% by 2050. The new deal could lower tariffs on UK exports to Switzerland, which could reduce annual duties for UK businesses by around £7.4 million.

It will also benefit the more than 14,000 UK businesses which already export goods to Switzerland, 86% of which are small and medium-sized enterprises (SMEs), by creating simpler trade rules for products of origin, customs procedures and digitisation.

CEO of SIX, Jos Dijsselhof, said:

The new UK-Switzerland free trade agreement’s shared ambition hold also great importance for the financial sector, fostering cooperation, trade, and mobility.

SIX welcomes this move, supporting open and international capital markets, promoting healthy exchange and competition between the two major financial centres in Switzerland and the UK.

Switzerland is a key investment partner to the UK with the total stock of Swiss foreign direct investment in sectors such as textiles, chemicals, manufacturing and financial services worth £74 billion in 2021, while UK investment into Switzerland was worth £52 billion. A new FTA would look to boost this even further, helping facilitate more investment by Swiss companies into communities around the UK and seeking preferential terms for UK investors in Switzerland.

Policy Chairman of the City of London Corporation, Chris Hayward, said:

The UK and Switzerland are the two largest financial centres in Europe which means strengthening our services trade relationship is a top priority for the sector. An enhanced trade agreement would address key cross-cutting issues including mobility, data flows and digital trade to the benefit of both jurisdictions.

Negotiating a new free trade deal with Switzerland along with a ground-breaking mutual recognition agreement in financial services presents a unique opportunity to set a new paradigm for services trade, and would provide a template for the UK’s future trading relationships.

Alexander Dennis Fleet Sales Director, Matthew Lawrence, said:

We’re the world’s leading manufacturer of double-deck buses and bus companies in Switzerland and we supplied Swiss national operator PostAuto with a fleet of low-emissions Alexander Dennis double decker buses.

A free-trade agreement between the UK and Switzerland would benefit us and our Swiss customers in streamlining the supply of spare parts, while also opening up business opportunities for further British-built buses.

Executive Director of International Policy, Association of the British Pharmaceutical Industry, Claire Machin, said:

Negotiation of an Enhanced Trade Agreement between the UK and Switzerland provides a pivotal opportunity for a world-leading agreement between two life science superpowers.

Prioritisation of life sciences in negotiations could help to boost the growth of our two innovation-intensive economies and set world-leading standards to encourage the creation and adoption of the next wave of scientific technologies.

During her visit to Switzerland, Badenoch will also meet with leading female business leaders at Advance, a network of close to 140 Swiss companies committed to increasing the share of women in management in Switzerland.

Background:

• The launch will take place at the Federal Palace of Switzerland. The first round of talks are scheduled for week commencing 22 May.
• Switzerland ranks as the UK’s 2nd largest trading partner in Trade in Professional and Business Services. In 2022, total PBS trade with Switzerland amounted to £9.2 billion (39% of total UK services trade with Switzerland).
• Talks will also look to provide long-term certainty on business travel, particularly for services firms, helping firms in a wide range of sectors, from life sciences to tech to share expertise, form vital partnerships and expand into new markets.
• We will also seek to cut remaining tariffs on UK exports such as red meat, chocolate and baked goods, which are currently very high. Switzerland imports over £5.5bn a year of agri-goods under product lines where tariffs still apply for the UK.
• The businesses are supported by Tenity, which provides incubation and acceleration programs to help startups in connect with entrepreneurs, experts, mentors, and investors for early-stage venture and late-stage venture investing.

• Benefits of ground-breaking free trade deals with Australia and New Zealand to be unleashed for British businesses and consumers later this month
• First trade deals negotiated from scratch by the UK and tailored to our strengths as a services-led economy
• Trade deals deliver on the Prime Minister’s priorities to grow the economy and drive innovation

British businesses and consumers will soon be able to reap the benefits of the UK’s first trade deals negotiated from scratch since leaving the European Union with the agreements set to come into force this month.

Expected to increase bilateral trade with Australia by 53% and with New Zealand by 59% in the long term, the two game-changing free trade agreements are anticipated to go live across all three countries from midnight on 31 May.

It comes as the Prime Minister meets both the Australian Prime Minister, Anthony Albanese, and the Prime Minister of New Zealand, Chris Hipkins, tomorrow for talks in Downing Street ahead of the Coronation.

Both trade deals will drive economic growth and innovation across the UK, Australia and New Zealand through the removal of tariffs on all UK goods exports, open unprecedented access for services, cutting of red tape for digital trade, and by making it easier for UK professionals to live and work in Australia and New Zealand.

It comes just weeks after the UK concluded negotiations to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a free trade area worth £9 trillion, putting us at the heart of a trading powerhouse.

Prime Minister Rishi Sunak said:

As some of our closest allies, and greatest friends, I am delighted our first built from scratch trade deals are with Australia and New Zealand.

These landmark deals squarely deliver on my priorities to drive economic growth, boost innovation and increase highly skilled jobs across the UK, ensuring we and our closest friends continue to prosper for generations to come.

Business and Trade Secretary, Kemi Badenoch, said:

With these two deals the UK is using our status as an independent trading nation to tailor agreements to our country’s economic strengths. Alongside our recent conclusion of talks to join CPTPP, the government is forging a bold new future alongside the world’s most dynamic and fast-growing economies.

Putting these trade deals into action will help create new opportunities for business, boosting wages and helping spur economic growth.

The UK and Welsh Governments have now made the final legislative changes needed to bring the trade deals into action.

Services are central to the UK’s economy, accounting for around 80% of its economic output and workforce, and one of its biggest export success stories. The provisions in these deals complement our strengths and will help deliver on the PM’s priority of growing our economy.

UK professionals from scientists and researchers to lawyers and accountants will have access to Australian work visas without being subject to its changing skilled occupation list. Brits will also be able to work more freely in New Zealand through commitments which enable UK service suppliers to deliver contracts.

Other UK benefits include:

• Investment opportunities and access to government contracts, including putting British businesses on equal footing to compete for an additional £10 billion of Australian public sector contracts per year and high investment screening thresholds for UK investors in New Zealand
• Tariff free access to both markets for all British goods and flexible rules of origins, giving businesses a competitive edge over international rivals
• Reaffirmed commitments to the Paris Agreement and opportunities to grow our low-carbon economy, with tariffs on environmental goods liberalised
• Removal of UK import tariffs on majority of goods from Australia and New Zealand, reducing prices for UK consumers on favourites such as wine and manuka honey and lowering costs on machinery parts for UK manufacturers
• Progressive rules on digital trade and free flow of data, cutting red tape for SMEs and easing trade while protecting intellectual property, brands and innovations

There are robust protections for British farmers in both deals, including staging tariff liberalisation for sensitive goods over time.

Both countries are key members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a huge trade bloc in the Indo-Pacific.

Businesses have welcomed the news, including:

Grimshaw, a global architecture practice with its origins in the UK, where it is known for its work on the global Eden projects as well as Waterloo Station, London Bridge station and the line-wide design for the recently opened Elizabeth Line.

It has been working in Melbourne since 2002 – instigated by its first project in that city, Southern Cross Station. In Sydney, the studio was established in 2010 and has designed and delivered important projects in infrastructure as well as commercial architecture, tertiary education and research laboratories including the Sydney Light Rail, Martin Place Metro Station and the recently completed Poly Centre, 210 George Street. Both studios have grown to now comprise nearly a third of Grimshaw’s world-wide staff.

It has also been working in New Zealand for almost a decade on the City Rail Link. In June 2023, it is due to formally launch its new studio in New Zealand and its Auckland premises will open with approximately 20 full time staff.

Mark Middleton, Global Managing Partner at Grimshaw, said:

Our approach has always been characterised by the same motivations and thinking which are the very essence of free trade – the movement of people and goods without restrictive tariffs or conditions. But with the advent of the new UK-Australia Free Trade Agreement, we can now approach the mobility of our architects through simplified and liberated arrangements for transfers between our studios.

Also of great importance to us is the integration into the UK-Australia FTA of the assurance that architects from both countries can provide services under contract in either country. This, combined with the provision that those architects within our practice who now wish to transfer between the UK and Australia can work for four years, double the previous term, provides us with much welcomed certainty as we construct our teams and extend our collaboration. This important development is mirrored in the UK-New Zealand agreement where UK architects can now transfer to our Auckland studio for three years.

With the formalisation of the new Australian and New Zealand FTAs, we now operate with a much welcome assurance that our business can continue to attract both our global collaborators and new talent to our Australasian studios, assuring our continuing growth and prosperity.

Seed & Bean, founded in London 2005 with the idea to create an ethical range of confectionery. The company previously exported to Australia and New Zealand, however this ceased due to COVID. It maintains an ambition to export to both nations again and the Free Trade Agreements (FTAs) would help do that.

Seed & Bean’s Chief Chocolatier Oliver Shorts said:

The trade deals with Australia and New Zealand will help us reduce the landed cost of our organic chocolate bars into the two countries. One of the big barriers to entry are the costs involved in getting the goods in, and this will allow us to help any potential distributor margins and permit the product to be a more viable opportunity in the market.

As part of the two Free Trade Agreements, originating British food and drink products will benefit from reduced tariffs.

The Fifth Wheel Company, which manufactures luxury leisure vehicles in North Wales. The company’s export sales make up over 40% of its annual turnover with its products reaching as far as Australia and New Zealand.

Fifth Wheel’s Technical Director, John Gethin Whiteley, said:

We believe our products are the best in the world and the Australia and New Zealand trade agreements will allow us to increase our export sales to these regions. As the Fifth Wheel concept is a recognised method of towing in Australia and New Zealand, and the appetite from the public is ever growing to live off grid and explore, we see a massive potential for our products in this marketplace and are actively looking for partners to help us grow.

As a result of the Free Trade Agreements, tariffs on all products will be removed making it more competitive for UK manufacturers to export their products to these markets.

Background

• The agreement is expected to enter into force on the 31 May, subject to finalisation of UK domestic procedures with remaining changes to UK law coming into force at the end of May.
• Please see here for more information on the UK-Australia free trade deal.
• Please see here for more information on the UK-New Zealand free trade deal.