Recently released research has revealed that a majority of UK
SME exporters have ambitious international expansion plans for the coming year.
According to a survey commissioned by American Express, just over half of all small and medium-sized UK businesses that currently operate internationally plan to enter new global markets during the next 12 months. European countries, including France, Germany and Spain, topped the list of expansion targets, although many firms are also looking across the Atlantic, with a fifth identifying the US as a potential target market.
A key reason for adopting such a strategy is to support growth aspirations by building business resilience through exporting. In total, nearly three quarters of respondents said that doing business internationally created resilience by providing protection from changing domestic market conditions. In addition, nearly six out of ten SMEs felt they would see greater returns from international trade than from trading within the UK.
Commenting on the survey’s findings, American Express Vice President and General Manager of Cross-Border B2B.
payments Harry Mole said, “Trading internationally continues to offer many fruitful growth opportunities for UK businesses – and it’s positive to see that so many plan to expand in the year ahead.”
The government has given formal approval to the Plymouth and South Devon Freeport which it is hoped will stimulate growth and create thousands of jobs by transforming how businesses can operate within the region.
As a result of the decision, the Freeport will receive up to £25m of grant seed funding and eligible businesses will now be able to join and take advantage of Freeport status. Firms moving into the site will benefit from a range of incentives, including tax reliefs, customs advantages, business rates retention, planning, regeneration and trade and investment support.
Approval of the Freeport will help accelerate the formation of advanced manufacturing clusters and build on the region’s status as a centre of excellence for marine, maritime, defence and manufacturing innovation and expertise. It will also harness and expand its work in nationally critical sectors including marine autonomy, maritime net zero, offshore renewable energy, maritime logistics and digital oceans.
The University of Plymouth will chair the Freeport Innovation Board and is driving the project’s innovation strategy. The university’s Vice-Chancellor, Professor Judith Petts CBE, said, “The Plymouth and South Devon Freeport will create exciting opportunities here in the South West that can benefit the country as a whole.”
Research commissioned by specialist lender Together has highlighted the significant investment challenge SME business leaders are likely to face over the course of the next 12 months.
According to the survey of 300 business owners, UK SMEs invested an average of £565,000 last year. However, this was substantially less than planned investment of £710,000, largely due to the difficult economic climate and, without government intervention, the study’s authors believe investment levels could fall even further in 2023.
The research also highlighted ongoing challenges relating to the cost of fuel and raw materials, difficulties with recruiting and retaining staff, global supply chain issues and high taxes. In addition, almost a third of SMEs said they had delayed plans to expand their workforce, while two-thirds had deferred plans to improve business energy ratings.
Commenting on the findings, Together Corporate Managing Director Chris Baguley stressed the need for “thorough and direct intervention from the government” to support SME growth ambitions. He added, “Every day, across the country, companies are struggling to make ends meet, let alone having the time or capacity to grow. With this study, we highlight the clear investment opportunities needing additional support across the SME sector.”
Industry groups have voiced their concerns over the scaling back of support on business energy bills recently announced by the government.
In a statement released on 9 January, the government said the current level of support was too expensive and that it was cutting the level of energy subsidies for the next financial year to £5.5bn. Under the new scheme, which will run until the end of March 2024, firms will receive a discount on wholesale prices rather than costs being capped, with heavy energy-using sectors receiving a larger discount than other sectors.
Some business groups welcomed the scheme’s extension which they said would provide more certainty for firms over the next 12 months. Others, however, warned that the level of support fell short for businesses that were already struggling with soaring costs.
Commenting on the day of the announcement, British Chambers of Commerce Director General Shevaun Haviland said, “An 85% drop in the financial envelope of support will fall short for thousands of UK businesses who are seriously struggling. While we welcome the 12-month duration of this package, its value is nowhere near far enough and means that for some firms, energy will now be a cost too far.”
Government plans to introduce new rights for employees to request flexible working from day one of employment have been welcomed by the Chartered Institute of Personnel and Development (CIPD).
The measures aim to empower workers to have a greater say over where, when and how they work by removing the 26-week qualifying period before employees can request flexible working. The new rules cover job-sharing, flexitime, and working compressed, annualised or staggered hours, as well as the option to work from a combination of the office and home.
Minister for Small Business Kevin Hollinrake said there was a strong business case for flexible working and described the move as a “no-brainer.” He also said that providing staff with more say over working patterns would make for “happier employees and more productive businesses” adding that studies have shown flexible working leads to improved financial returns.
Responding to the announcement, CIPD Chief Executive Peter Cheese
said, “This new right will help normalise conversations about flexibility at the start of the employment relationship, with significant benefits for employees in terms of wellbeing and work-life balance. Just as importantly, it will also enable organisations to attract and retain a more diverse workforce and help boost their productivity and agility.”
SPRING BUDGET DATE ANNOUNCED
Chancellor Jeremy Hunt has announced that this year’s Spring Budget will take place on Wednesday 15 March. This will be Mr Hunt’s second fiscal event, following the Autumn Statement he delivered in November. The Chancellor also confirmed that the Office for Budget Responsibility has been commissioned to prepare an economic forecast to accompany the Budget statement.
RATE RISE BLOW TO SMALL BUSINESSES
The Federation of Small Businesses (FSB) has said last month’s Bank Rate increase from 3% to 3.5% will heap further pressure on the small business community. FSB National Chair Martin McTague said, “The precipitous climb in borrowing costs in under 12 months has hit small firms hard, eroding their margins at a time when many are struggling with the very cost increases which prompted the Bank of England to increase the rate in the first place.”
HIDING HEALTH CONDITIONS
Research commissioned by Bupa suggests just over two in five employees avoid telling their employers about less visible disabilities. The main reasons for keeping such conditions to themselves were to avoid causing a fuss and not wanting to be treated differently. However, almost a quarter did so due to worries their employer would not believe them while a fifth expressed concerns that their impairment might affect career opportunities.
On 9 December, the Chancellor announced a series of regulatory reforms that are collectively
designed to drive growth in the financial services sector and make the UK the world’s most innovative and competitive global financial centre.
The Edinburgh Reforms centre on government plans to seize the benefits of Brexit by setting out a detailed timeline for repealing and replacing EU retained laws governing financial services. The ultimate aim of the reforms is to deliver a smarter regulatory framework for the UK that is agile, less costly and more responsive to emerging trends.
A key element of the plan is a commitment to make substantial legislative progress over the course of 2023 on repealing and replacing.
Solvency II, the rules which govern insurers balance sheets. This reform is expected to unlock more than £100bn of private investment for productive assets such as UK infrastructure.
Speaking on the day of the announcement, Mr Hunt said, “We are committed to securing the UK’s status as one of the most open, dynamic and competitive financial services hubs in the world. The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses.”
The Chancellor also reaffirmed the government’s commitment to implement changes to EU regulations in four other high growth industries – digital technology, life sciences, green industries and advanced manufacturing – by the end of this year.
Analysis conducted by Wysa suggests the mental health crisis amongst the UK workforce is much worse than official estimates show for the population at large.
Research conducted by the mental health app provider found that just over one in three working people suffer with moderate to severe depression or severe anxiety. In comparison, the most recent figures released by the Office for National Statistics suggest around one in six of the total adult population struggle with such issues.
Wysa’s data also shows that mental health problems are more prevalent among the younger generation,
with almost half of workers in the under-24-year-old age range suffering with moderate to severe anxiety or depression. This compares to just over a quarter of workers in the over-54-year-old category demonstrating such symptoms.
Commenting on the findings, Ross O’Brien, Managing Director UK at Wysa, said, “We can see that employees are struggling more than the average population. We owe it to our workforce to find a different solution to addressing mental health problems.”
All details are correct at the time of writing (12 January 2023)
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