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WEEKLY POLICY UPDATE 11/02/16

Home / News & Opportunities / Chamber News

Date: 11/02/2016

This week’s policy update looks at the National Living Wage, the increasing cost of car parks in Herefordshire and the final local government settlement.

  1. BCC: Wholesale simplification of business tax needed
  2. Monetary Policy Committee votes for no change on interest rates
  3. National Living Wage becomes law this April
  4. Price rises across Herefordshire car parks is a concern for business
  5. Worcestershire County Council Leader responds to final local government settlement

BCC: Wholesale simplification of business tax needed
On the day the Public Accounts Committee takes evidence on corporate tax deals, the BCC and most businesses see large-scale tax avoidance by major corporates, and particularly large multinationals, as unfair competition.

In order to limit the scale of this, the BCC is calling for immediate action on three fronts:
  • A wholesale simplification of business tax to eliminate the loopholes that give rise to tax avoidance schemes
  • HMRC enforcement activity to concentrate on aggressive tax avoidance and not punish those who make unintended mistakes
  • Push for swift international action to stop a minority of companies shift profits across the globe in aggressive avoidance schemes
John Longworth, BCC Director General, said:
“Until these reforms are realised, all companies with substantial undertakings in the UK should demonstrate their clear commitment paying the profit taxes due here. Other firms, and the general public, can see through the artifice of creative accounting – and their anger is growing.”
 

Monetary Policy Committee votes for no change on interest rates
The Bank of England has released the minutes of its latest interest rate setting committee, the Monetary Policy Committee (MPC). The minutes revealed that it voted 9 – 0 to keep interest rates at 0.5%, with Ian McCafferty, who has been voting for an increase since August, unexpectedly voting for no change.

Interest rates have been at 0.5% since March 2009 and with still not being close to their target of 2%, Governor Mark Carney has written another letter to the Chancellor. You can read the letter here.

The Bank have also released its latest inflation report, it cut its forecast for growth this year to 2.2%. Despite predicting growth of 2.5% in November last year.

Sophia Haywood, Policy & PR Executive at Herefordshire & Worcestershire Chamber of Commerce, commented:
“The decisions made by the MPC were not surprising given the hostility of global financial markets in recent months. The slowing pace of wage growth and weakening growth in China and the US has just strengthened the case for the preservation of low interest rates for the foreseeable future.”
 

Get ready for the change! National Living Wage becomes law this April
On 1 April 2016 the National Living Wage (NLW) will become law. From this date employers need to pay eligible employees aged 25 and over at least the new rate of £7.20 per hour. If you’re an employer, you’ll need to make sure you’re paying your staff correctly from 1st April 2016, as the NLW will be enforced as strongly as the current National Minimum Wage.

Take these four steps to be ready for the change:
  1. Check you know who is eligible in your organisation. Find out on GOV.UK’s employment status page www.gov.uk/employment-status  
  2. Take the appropriate payroll action
  3. Let your staff know about their new pay rate
  4. Check your staff under 25 are earning at the least the right rate of National Minimum wage
For more information and further guidance please visit The National Living Wage website.
 

Price rises across Herefordshire car parks are going to be bad for business
More than 40 council operated car parks across the county have been affected by Herefordshire Council’s overhaul of car park charges. The initiative came into force last week  and means that motorists will face a £13 charge to leave their vehicle there for the day.

Over the last few months there has been an influx of shoppers, with 5,000 people coming to watch the switching on of the Christmas lights in 2015. There are now fears that these costs will deter visitors staying for long and will negatively affect the traditional shopping areas of the city centre by pushing them out to retail parks or supermarkets.

Joanie Roberts, Area Relationship Manager at Herefordshire & Worcestershire Chamber of Commerce, said:
“We are pleased to see Hereford flourish and it is important that we continue to encourage visitors to the city. We are concerned that these changes to parking charges may hinder Hereford’s growth as they may discourage people from visiting the city centre.”
 
 
Worcestershire County Council Leader responds to final local government settlement 
The local government finance settlement is the annual determination of funding to local government. Worcestershire County Council has received an extra £2.5m for two years transition support as part of the Government’s four year settlement offer.
 
They will be considering how to best spend the money between now and 2020 to support ambitions for the county and to help deliver savings of approximately £25m per year.
 
There has been some controversy over the final settlement, as David Cameron has been accused of quelling Tory rebels ahead of local elections with a new £300m relief fund. However the Department for Communities and Local Government have stated that the funding settlement for councils is fair and ensures that those facing the highest demand for services continue to receive more funding.
 
Councillor Simon Geraghty, Leader of Worcestershire County Council,  said:
"We welcome this news. It is good news for the Council and it is good news for Worcestershire. In our submission to the Government we raised a number of points and it's very pleasing to see that they have listened to us.”