The Queen’s Speech
During the annual state opening of Parliament this week, the Queen announced plans for the government to pass new laws to protect your personal data and to create a commission for countering extremism on the World Wide Web.
The Queen’s speech also covered eight bills relating to the Brexit and the UK’s departure from Europe and the implications it will have for key industries within the UK. It also covered Theresa May’s minority government’s intention to discard several number of initiatives including the expansion of grammar schools within the UK and a vote to restore the traditional sport of fox hunting.
The manifesto for a digital charter remained, and the Queen was keen to put her point across on this issue. “A new law will ensure that the United Kingdom retains its world-class regime protecting personal data, and proposals for a new digital charter will be brought forward to ensure that the United Kingdom is the safest place to be online.”
It was also announced that under new guidelines, courts will be modernised and the court system itself will be brought up to date, something that previous governments have been unsuccessful in achieving in various attempts for quite some time.
The Queen mentioned the terror attacks and discussed the governments counter-terrorism plans to be revised, in order to allow the police and other security services to have more power to act during these incidents. Alongside this, the length of prison terms for terror suspects and terror related felonies will also be adjusted to ensure that anyone accused of such offences will be kept under lock and key in order to keep the population safe.
The Queen concluded: “My government will bring forward proposals to ensure that critical national infrastructure is protected to safeguard national security. A commission for countering extremism will be established to support the government in stamping out extremist ideology in all its forms, both across society and on the internet, so it is denied a safe space to spread.”
Brexit or Brassic?
Reports are showing that the growth in borrowing on loans, credit cards and overdrafts has dramatically declined in May this year. It has been reported that personal debts have slowed, compared to April’s figures of 6.4%, with May only reaching 5.1%.
Figures show that personal borrowing through loans and overdrafts has decreased significantly, particularly since the beginning of 2017. However, people do not appear to be putting money aside for savings either. This has been officially been the slowest growth rate annually since December 2011.
The City Regulators, namely the Financial Conduct Authority and The Bank of England have all been advised to be vigilant over the current situation during the last 12 months. Growth rates in overdraft and personal loads have fallen from 6.3% at the end of April to 4.8% to the end of May this year.
A statement from Eric Leenders, the BBA Managing Director for Retail Banking, announced that the figures show that credit growth in personal loans, cards and overdrafts had indeed slowed down in the run up to the General Election which then was highlighted with lower spending and increased everyday household costs, which affected the growth in deposits and personal savings.
BBA figures are showing the current squeeze on individuals has affected the slowdown in mortgage levels. Because of the rise of inflation, mortgage applications have also dropped by 3.3% this year in comparison to May 2016 figures. In a report from Estate Agent Jeremy Leaf, he concluded that “Last May the housing market was still reeling from the imposition of the 3% stamp duty surcharge on second homes so we would have expected approval numbers to have been considerably above where they were this time last year.”
He went on to say that there was no indication that an improvement will be made in the property market, and that the current conditions will remain the same for a while. Both buyers and sellers are being more cautious with their trading and need to remain realistic in the property climate. Reports have also shown that customers are hesitant about re-mortgaging their properties during the period.
A window of opportunity has opened for our energy suppliers, with recent proposals from the government to cap energy prices, according to Vice President of the Energy Institute, Steve Holliday. The government, prior to the General Election made proposals to work alongside the energy companies in order to help millions of domestic gas and electricity customers to reduce their current energy bills by £100 per annum. The aim is to protect lower income customers that are on a the lowest cost tariff. However, during the Queen’s Speech last week, the proposals seemed to have been ‘watered down’, and commitment to the suggestion no longer appeared to be a priority.
Investigations, undertaken last year by the Competition and Markets Authority came to the conclusion that many households were paying considerably too much to their energy suppliers, especially those customers that were on variable tariffs.
Calculations were made with the outcome being that customers were paying up to £1.2 billion over the required amount, so recommendations were made to cap the price for households that were using pre-payment meters.
It was reported that suppliers were not in total agreement with these findings, and questions were asked by several large suppliers for justification. Suppliers have found themselves under a lot of pressure from the Government and their mistreatment of their loyal customers that were using standard tariffs.
Energy companies have shown a mixed reaction to the notion of price capping energy supplies according to Mr Holliday, a former Chief Executive of the National Grid, speaking at the launch of the Energy Institute’s Annual Barometer, an industry members meeting that takes place to gather their views and comments.
466 members of across the energy sector took part in a survey with an outcome that many of the views indicated that they could see some advantages in tackling the affordability issues, and by helping customers that were classed as in poverty.
However, results also showed that the majority of respondents were actually against the cap. Mr Holliday said: “There were lots of people identifying the negative impact on investment, decarbonisation and on competition in the supply industry.”
He went to say that when they looked across the whole board of people taken part in the survey, it showed that more than half of the participants did not agree with a price cap.
The main concern with the proposals to the energy sector is Brexit. Members have voiced their concerns regarding the uncertainty around policies within the energy providers themselves, the number of skilled and experienced labourers and their availability, as well as any future trading agreements, energy costs and supply security, not forgetting future investment.
Mr Holliday expressed concerns around the UK’s energy economy and announced that any future policies should not be drowned out by politics and Brexit. Members were keen to keep most EU energy directives protected by UK law; however a majority of respondents wanted to see the UK abandon EU state aid rules, thus dividing opinions on the British involvement within the EU emissions trading system.
The government has confirmed that as part of its Brexit plans, the UK are intending to leave “Euratom” the European nuclear treaty that provides the ongoing safety and transport of nuclear materials. It is believed that energy professionals feel that this will have a negative effect on aspects surrounding the nuclear sector, as well as affect the cost and deliverability of future nuclear plants, naming Hinkley Point C as an example.
President Trump was also mentioned during the proceedings, and his decision to withdraw the US from the Paris Climate Agreement has been described by many as a “concern”.
In order to get their finances back on tracks, arts and crafts market leader Etsy have announced that they will be cutting their work force with recently announced redundancies.
22% of their handicraft staff members will be losing their positions through the cuts, which would be approximately 230 people. This action is being taken to ‘sharpen its focus’ on it’s principal business. The announcements were made in May, although original figures showed that it would affect only 7% of its workers. Further announcements this week by new CEO, Josh Silverman confirmed a following 140 employees would be facing the chop, which means that approximately a quarter of the entire Etsy workforce will be losing their jobs.
During a recent presentation, Silverman commented on the situation. “In order to drive focus, we took decisive steps to double down on the fewest, highest-impact initiatives in our core marketplace while de-prioritizing other projects and streamlining our resources. Parting ways with our colleagues is not easy and I am thankful for their contributions.”
He went on to describe the recent announcements as a move forward, with a more agile structure that will support their current and ongoing business requirements, allowing for a more efficient way to aid the creativity in entrepreneurs around the world.
With an estimated compensation pay-out of $12.5 million and $16.8 million, cuts will be made within the marketing, management and administration areas at Etsy’s headquarters in Brooklyn, New York. These cuts have not been taken lightly. They are as a result of dramatic financial losses during the last fiscal year with the company’s net losses being $29.9 million. The new re-vamped plans in place will see if Etsy can work hard enough to improve their profitability under new CEO Silverman and put Etsy back into the black.
This week saw shares in Etsy trading at $14.10, below its original 2013 IPO price of $16.