Need To Know: Your Business Updates for March 2022

  • 01 Mar 2022

Welcome to the March 2022 'Need to Know' update. You'll find key information on protecting consumers, the latest international trade agreements, the possible return of imperial measurements, how businesses can help end rough sleeping, Scotland's new plan to help business and the delayed budget in Northern Ireland.

New law to make doing business simpler while protecting consumers

A new law will help UK firms do business while maintaining strong protections for consumers, the government has announced.

Currently, the UK has retained EU rules that exempt businesses from competition law in certain circumstances. The government has received expert advice from the UK’s Competition and Markets Authority which recommended a new, bespoke competition law exemption for the UK, replacing the retained EU rules which expire on 31 May 2022.

The new rules will ensure competition law does not impose unnecessary burdens, encouraging so-called ‘vertical agreements’ which are agreements between companies at different levels of the supply chain, such as farmers and grocers.

 

These vertical agreements benefit consumers by encouraging efficiencies, investment and innovation. Benefits of the new UK system include:

  • removing wide retail parity obligations from the exemptions. These obligations specify that a product or service may not be offered on better terms on any other indirect sales channels, including through intermediaries, such as other distributors or online platforms. For example, currently a travel agent might require a hotel not to offer its rooms on any other sales channel at a better price or on better terms and conditions, limiting the incentives for travel agents to compete
  • creating a more level playing field for high streets and brick-and-mortar retailers by expanding the exemptions to cover agreements that treat online and offline sales differently. This includes charging the same distributor a higher price for products intended to be resold online than for products intended to be sold offline
  • more flexibility for businesses to design their distribution systems, for example by allowing a business to combine distribution rights by allowing multiple retailers of its product in one geographical area while having an exclusive arrangement with another retailer in another area

The government is consulting on the legal wording of the exemption. The Competition and Markets Authority will publish further guidance to accompany this legislation, the CMA Verticals Guidance, in due course.

Read more here: https://bit.ly/35BY7Vz

The UK reaches a major milestone to join £8.4 trillion CPTPP free trade area

The UK has reached a major milestone to join what the International Trade Secretary has hailed ‘one of the largest and most exciting free-trading clubs in the world’.

Confirmation from the Japanese government, as Chair of the UK’s Accession Working Group on behalf of the CPTPP members, in the early hours of this morning means the UK has moved into the second ‘market access’ phase of negotiations with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade area worth £8.4 trillion in GDP.

Moving to the final stage of the accession process is a key milestone towards acceding to CPTPP and means the UK has demonstrated to members of the partnership that we are a high-standards, fair trading economy.

Market access negotiations will now begin in which the UK will agree new trading relationships with CPTPP countries, which could lead to 99.9% of UK exports to CPTPP being eligible for tariff-free trade.

 

Benefits of UK accession could include:

  • New guarantees of access to services markets, providing valuable opportunities for the UK’s world-class services industry to increase exports to CPTPP countries.
  • Ensuring UK businesses are in an even better position to expand their digital reach in the global marketplace thanks to CPTPP’s modern rules for digital trade across all sectors of the economy.
  • Making it easier for some UK exports to qualify for preferential tariff treatment than under bilateral free trade agreements alone and increasing demand amongst CPTPP members for imports of UK goods such as British engines. CPTPP’s rules of origin means traders can more easily import goods from other members.

CPTPP membership is expected to benefit every nation and region of the UK, with the greatest relative gains predicted to be in the West Midlands, Scotland and Northern Ireland. There is expected to be a £53 million boost to the Gross Value Added of Wales, £45 million for Northern Ireland and £163 million for Scotland following UK accession to CPTPP.

Read more here: https://bit.ly/3C1cNtL

Two new international trade deals signed by UK

The UK has signed a far-reaching trade deal with New Zealand that will remove trade barriers on a huge range of UK goods and services and provide new opportunities for British businesses.

The deal has been signed by International Trade Secretary Anne-Marie Trevelyan and New Zealand Minister for Trade and Export Growth Damien O’Connor. After reaching agreement in principle last October negotiators have worked intensely to finalise the agreement.

The UK-New Zealand trade relationship was worth £2.3 billion in 2020 and is now expected to increase by almost 60%, boosting our economy by £800 million and increasing wages across the UK.

Under the new deal, tariffs will be eliminated on all UK exports to New Zealand, including current tariffs of up to 10% on clothing and footwear, 5% on buses and up to 5% on ships, bulldozers and excavators.

Smaller businesses will also find it easier to break into the New Zealand market as a result of modernised customs procedures, such as digital documents and customs clearance as quick as six hours.

 

Other UK benefits include:

  • UK professionals, such as lawyers and auditors, being able to work in New Zealand more easily, and bring their families with them.
  • Red tape being slashed for the 5,900 UK SMEs who export goods to New Zealand and employ 233,000 people.
  • Guarantees for small businesses who will benefit from practical advice and support to find opportunities and link to commercial partners in New Zealand.
  • Flexible rules of origin that will give British exporters an advantage over international rivals in the New Zealand import market, which is expected to grow by 30% by 2030.

In addition the New Zealand deal, the UK has also signed the Digital Economy Agreement (DEA) with Singapore.

The government is describing the DEA as the most innovative trade agreement ever signed, and the first by a European nation. It will strengthen UK trading relationship with Singapore – worth £16 billion in 2020 – by ending outdated rules that affect both goods and services exporters, making it easier for UK business to target new opportunities in both Singapore and the wider region.

The deal will cut red tape for goods exporters, streamlining cumbersome border processes and replacing time-consuming and costly paperwork with e-signatures and e-contracts.

Read more here: https://bit.ly/3HyJDmE

Trading standards body urges caution on reintroduction of imperial markings

The Chartered Trading Standards Institute (CTSI) has urged caution and no rushed decisions concerning the UK Government's announcement that it intends to study the economic impacts of reintroducing imperial markings.

CTSI called for a full consultation and impact assessment on this matter in September last year. It welcomed the opportunity to provide the necessary expert opinion from the trading standards profession for any study into the issue.

TSI recognises the vital importance of getting consumer protection right, and the units we use to weigh and measure goods are a keystone element of the system.

There are several concerns about the reintroduction of imperial units among the trading standards profession, which regulates weights and measures. These include questions about trading standards service capacity to enforce new regulations due to the 50% budget cuts experienced over the past decade. There would also be demands for new consumer education about the units, which have not been taught as primary units of measurement in school curriculums since 1974.

CTSI Chief Executive, John Herriman, said: "While we recognise the UK Government's desire to identify opportunities afforded by the exit from the EU and also the importance of business and consumer choice, it is important that we look at the realities of implementation, enforcement, and their impact on consumers, business and the economy as a whole. This is why CTSI called for a consultation last September, and why we welcome the opportunity to inform the study.

 

"CTSI believes the proposal risks creating additional complexities for business and consumers, creating uncertainty in the economy which undermines the Government's goals for economic growth. Our considered view is that it is better to focus on ensuring stability in the marketplace for businesses and consumers than focus on the unit measures under which goods are sold. This would be a better route to supporting market growth rather than risk creating confusion and additional costs at multiple levels."

Read more here: https://bit.ly/3suZX3N

Businesses told to play their part in drive to end rough sleeping

Business leaders are being urged to give jobs to former rough sleepers in a bid to help keep people off the streets for good.

At a meeting with top executives, ministers called on business and charity leaders to be more generous in offering employment opportunities to former homeless people, challenging the stigma around giving jobs to people who been living on the streets.

The drive is part of a £2 billion package of funding to help eradicate rough sleeping by targeting the root causes of the problem and ending rough sleeping by the close of this Parliament.

Employment improves the accommodation prospects for people experiencing homelessness and rough sleeping both in the long and short term – an income means they have more choices and an employment contract will improve the negotiation position of any tenant.

At the recent virtual round table, Minister for Rough Sleeping and Housing Eddie Hughes, and Minister for Welfare Delivery David Rutley, stressed that finding jobs for people was key to helping to end homelessness and called on businesses to do more.

Minister for Rough Sleeping and Housing Eddie Hughes MP said: “A job for someone who has been homeless or slept rough is a vital step towards helping them to rebuild their life and can be crucial to ending the cycle of homelessness.

“There was a huge amount of support around the table today – and we heard first-hand just how much giving someone who was homeless a job benefits the individual and the business.

 

“Now I’m calling on more businesses – big and small – to step up and do their bit to change lives – just by simply giving someone a chance.”

Read more at: https://bit.ly/3vs792z

FSB gets behind Chief Entrepreneurship Officer for Scotland

The Scottish Government has launched a new strategy designed to transform Scotland’s economy, including a promise to create a new Chief Entrepreneurship Officer.

The Federation of Small Businesses (FSB) in Scotland welcomed many of the headline measures but urged Ministers to listen to small and medium sized businesses and the self-employed, as well as trade unions and big business.

Andrew McRae, the FSB in Scotland’s policy chair, said: “A new government report won’t help pay any bills today, but the headline measures in this strategy could help Scotland realise its long-term ambitions.

“Encouraging more people to go into business is the key to broadening and strengthening our economic base.  It’s also a powerful tool in driving social mobility. That’s why we’re behind the idea for a Chief Entrepreneurship Officer in the Scottish Government.

Read more here: https://bit.ly/3hxqlDT

FSB responds to Northern Ireland draft budget delay

Although the political turmoil at Stormont has stalled the draft budget, FSB has welcomed the announcement of support for small businesses.

Commenting on the Finance Minister’s statement Roger Pollen, Head of FSB NI said: “It is deeply regrettable that the draft budget, which was out for a period of consultation, cannot be delivered because of the lack of a functioning Executive. However, despite the current turmoil at Stormont, FSB is pleased that the Finance Minister has recognised the need to support businesses as they emerge from the worst ravages of the pandemic restrictions. Freezing the non-domestic regional rate and continuing with the £50 million rate relief package to support a rates holiday for most businesses will help to ease the significant and mounting pressures they face.

 

“The three-month rates holiday it will provide for retail, tourism, hospitality, leisure, childcare, newspapers and airports is a crucial assistance in sectors that have been amongst the hardest hit by the pandemic. “Additionally, the one-month rate holiday for almost all other businesses will also provide some breathing space as they try to return to normal trading.

“This is a welcome bit of certainty in an otherwise turbulent period of government from Stormont.”

Read more here: https://bit.ly/3hwm8Aq

 

Related topics