Open Banking Levels the Playing Field for SMEs and Brings Hope of a Better Future for financial services

It’s been a long time coming but we are entering an era of greater access and better financial services that will finally put the needs of customers first.

The catalyst of achieving this much needed and long overdue result is the culmination of big debate, endless lobbying and necessary government legislation. All this hard work will bear fruit on January 13th when the law of Open Banking comes into force.

For years banks have sat on the most valuable asset to any business: the infinite transactional and financial data of customers that essentially define individual’s tastes, preferences, budgets and – crucially – their requirements for building and planning their lives.

High street banks – reluctant to share their oligarchy of power, held on tightly to this data – unwilling to share it with others – or use it to enrich their consumer experience and put them at the heart of their business model.

With open banking, this power will be wrestled from the big incumbents and data will be available to third parties, SMEs and new digital players. This will lead to a better future for financial services, one that increases competition and creates a greater consumer experience.  More businesses will finally have a shot at delivering services that are tailored and relevant to individual customers.

Open Banking will also strengthen the role and influence of FinTech companies that have the agility and open APIs to make data sharing possible and to disrupt the status quo. We have already seen new banks like Starling Bank taking the lead, by creating partnerships with other FinTechs to create a customer rich ‘Amazon of Banking’ experience.

Together with multiple significant other sources of data being made available with consent and through API format, this will finally deliver financial products in a simple and meaningful manner, with automated prompts as companies or market products change, resulting in data innovation and improved financial outcomes, as well as removing the hassle for enterprises, saving time and money.

Key to this is delivering analytics in an easily understandable form without overwhelming businesses – leveraging the rapidly advancing data science technologies, machine learning and AI, as well as outstanding design and user experience is part of the market change we are moving towards.  While the UK and EU lead the way, there are early sprigs of global growth for international solutions.

Incumbents are not resting on their laurels. Many banks and financial institutions that make up the global sector are making impressive strides to capitalise on open banking, while also exploring valuable collaborations with new innovators that can help them harness the immense value of their data.

A great example is BBVA, which has embraced the digital movement and has set itself apart from other global offerings and is putting the client front and centre. The Spanish bank has nurtured the development of impressive FinTech firms – such as the digital ID startup Covault- while also making some canny acquisitions to keep it at the forefront of innovation that resonates with a new generation of consumers and keeps them agile and technology focused.  This includes the purchase of digital bank Simple.

Open banking also presents some challenges. Exposing large quantities of personal consumer data could increase the risk of cyber-attacks, hacking and identify-theft. The possible reluctance of customers to share their personal data could also derail the initiative. Educating consumers and gaining their trust around data sharing will therefore be crucial to the success of this initiative. So too the need for businesses to share information within a secure platform and for online payment providers to be scrutinised by the rigorous laws in place.

If all goes well, the developments of open banking – and the opportunities they bring to consumers– cannot be overstated. Banks will get another chance at creating better value-added services, while SMEs will finally have the access they need to deliver what their customers truly want and ultimately transform their consumer experience.  Additionally, corporates are also now included in the scope of Open banking, increasing pressure on banks to deliver improved services to the neglected business market.

We only hope that customers will see the value of it all to willingly share their data and banks will leverage their relationships of trust to deliver solutions of value to their commercial client base. With their consent, the blueprint for a better future for finance can be mapped out for generations to come.

Akoni helps businesses make the most of their cash. Contact us at contact@akonihub.com for further insights and questions. Register free at AkoniHub.com and follow us on Twitter

WHAT is MiFID II and How Will It Impact SMEs

MiFID II (Markets in Financial Instruments Directives II) is a law that comes into force today – and it’s going to radically transform the way assets are traded and how money is managed for investors.

For those that don’t have the time to read the 7,000-page document, here’s a quick summary of the new law– and why it could – inadvertently – make it harder for small and medium businesses (SMEs) to grow.

MiFID II is the EU ‘s second big initiative to regulate markets and to create new rules on how information is shared, prices are set, and how brokers pay one another.

The regulation serves a noble purpose – to democratise financial markets and to make it fairer and more stable.

The legislation is broad and far-reaching, and extends to any institution trading European securities – no matter where they are based in the world.

This regulation is a follow up to the first MiFID law, which came in 2007 and served to harmonise rules for stock trading. The financial crisis hit a year later and threatened the future outlook of the sector. Anxious policy makers worried about another financial meltdown, decided that more protection was needed to safeguard investors and to help create a more sustainable financial services model.

This concern led to the birth of MiFID II, which extends the harmonisation of rules beyond cash equity markets to include commodities, bonds and so much more. The law not only makes markets more transparent, but also regulates trading behaviour and lifts the curtain on the actual cost of trading and investing in stocks for those that are buying them.

At present, many securities are still traded in broker-to-broker deals, which is opaque and investors can’t determine whether they are getting the best deals. MiFID II will change this scenario while also ushering in a new era of open and regulated platforms. Automated trading currently makes up more than half of all trades and several major flash crashes have been blamed on these computer algorithms. To protect investors, the platforms must be registered with regulators and to include circuit breakers to shut them down.

It’s not just automated trading platforms that will be impacted by regulation. Research once provided for free by financial institutions, analysts and paid for by trading commissions will need to be paid for by fund managers and other third parties, to avoid conflict of interest.

This has sparked some concerns for SMEs, as MiFID II will indirectly impact the smaller end of the market as research could focus on the bigger sectors and companies. Brokers will probably avoid covering small-cap SMEs, impacting those firms’ ability to access investors.  At the same time investors will be reluctant to invest into SMEs with low level of research available or reduced quality. Long term, this could undermine the ability for these businesses – the bread and butter of every economy- to scale and grow.

While MiFID II has been created with the best of intentions to stabilise the markets and offer greater protection for investors, more needs to be done to support the SMEs that could potentially be shut out from the benefits that MiFID II aims to create.

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Government launches new industrial strategy

Today sees the launch of the Government’s new industrial strategy.  Last week Nigel Wilson called for us to put back the Capital into Capitalism and that same (budget) afternoon, Phillip Hammond name checked the “Patient Capital” project that is designed to do just that.

The new strategy for industry aims to tackle weak productivity and support businesses to counter any new problems caused by Brexit. The plans are laid out in the so-called Patient Capital Reviewintended to support innovative firms to access the finance that they need to scale up. The review addresses three key areas:

  • Unlocking institutional and retail investors’ capital
  • Increasing the number of venture capital (VC) funds that can deploy patient capital at scale
  • Increasing returns to scale-up investments

In our last week’s blog on the budget announcement we mentioned the better regulated incentives for EIS as a great step for investors and start-ups. The plan is to extend the investment limits for existing EIS and VCT schemes, targeting the lack of capital availability, particularly at the boundary of the existing EIS and VCT threshold. Get all the details in the full Patient Capital Review, which you can download here.

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Bank of England warns Brexit will put strain on regulatory resources

The Bank of England has warned that the task of regulating the City after Brexit will put a strain on its ability to police the financial sector.

Deputy governor Sam Woods also said the Bank’s regulatory arm, the Prudential Regulation Authority, faced “a material risk to its objectives” – which include promoting financial stability – as it deals with the UK’s exit from the EU.

Read the full story here.

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Where are corporates hoarding their cash?

Treasure

The UK has so far defied the pessimists over Brexit, and done remarkably well in its recovery from the latest recession.

The fast-growing FinTech sector is doing particularly well, and the government has identified it as a priority area, saying it provides 60,000 jobs and contributes around $9 billion to the economy.

According to trade body, Innovate Finance, $564 million of venture capital poured into British FinTech companies in the first half of 2017. That’s up 37% from the first half of 2016.

More than half the investment came from outside Britain, with a third coming from venture capital firms based in the United States.

Worldwide, FinTech investment for the first half of the year stood at $6.5 billion. Just over half that went into US startups and $1 billion into China. That places the UK third for global FinTech investment.

The UK figure still lags behind 2015, when a record $676 million was invested in the first half of the year and over $1.3 billion for the entire year. However, from July 1 to July 23, UK FinTech has already raised another $155 million.

Abdul Haseeb Basit, Innovate Finance’s Chief Financial Officer, told Reuters: “Things have slowed but we’ve seen an improving recovery since the referendum last year.”

But it’s not all good news.

  • Unemployment has fallen to a 40-year low (however, inflation-adjusted wages are significantly below the level they were ten years ago)
  • The UK has been the second fastest growing economy in the G7 for the past two years (however, growth is based on household and government consumption, not investment and net trade)
  • Business investment as a share of GDP is virtually back to pre-crisis levels (however, it is still low by international standards and seems to have plateaued. In manufacturing, it fell by 6.6% last year)
  • Profit margins in the first quarter of 2017 rose to a post-recession high (however, companies are choosing to save, rather than invest)
  • Sterling has lost value since the Brexit vote (however, instead of improving their export prices or investing for productivity, UK firms are banking the extra profit in low-interest or no-interest deposit accounts)

Productivity is the ‘magic pill’ that raises economic output per worker and leads to higher wages and living standards – but productivity growth is lower.

One of the reasons for the UK’s weak productivity, is poor levels of investment.

Cash deposits by private non-financial corporations were up by more than 10% last year, reaching 648bn. That’s equal to four times annual business investment and nearly a third of annual GDP.

Corporate cash

Samuel Tombs, chief economist at Pantheon Macroeconomics, says business investment would surge if firms spent just a small proportion of their stockpiled cash.

With uncertainty hanging over the UK economy, it seems that companies are looking to invest more abroad, particularly in the eurozone, and less at home.

Chancellor Phillip Hammond, has reportedly said that we must hold our nerve and stick to the plan for bringing the public finances back into balance.

SMEs are the bedrock of growth, and underpin our economy. We therefore support the calls for the Chancellor to make Britain the best place in Europe to invest, by offering tax incentives and any other measures.

Meanwhile, businesses should be using cash planning tools to generate income from their surplus cash. By moving it into accounts with the best interest rates, they could earn enough to employ a new staff member for improved productivity, or to launch a marketing campaign that drives further business growth.

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Newsflash: Are interest rates set to rise?

graphs and charts

Just over a week ago, we wrote about how the pound has fallen since the Brexit vote: Pound down, inflation up

How fast things change!

In the last few days, the pound has started to bounce back up against the dollar, as you can see from this chart:

GBP v USD
Source: BBC News Market Data

That’s not the only shift that’s going on.

The Bank of England’s Monetary Policy Committee (MPC) meets monthly to decide what to do about UK interest rates.

Rates have been on hold at a record low of 0.25% since August 2016. The only one of the eight MPC members who votes for a rise is typically MIT professor, Kristin Forbe (and she’s leaving the committee this month). Yesterday, she was surprisingly joined by Ian McCafferty and Michael Saunders. The last time three people called for rates to increase was May 2011.

This signals that policymakers are increasingly concerned about inflation rising even though the economy slowed to 0.2% in the first quarter.

The Bank had expected inflation to peak around 2.8% in the second half of this year, but now thinks there is a risk it will reach 3.0% by autumn.

The MPC said a further fall in the value of the pound would add to upward pressures on inflation, and that inflation had picked up more quickly than expected since last month’s economic forecast.

The committee stressed that all members agreed any increases in the interest rate would be ‘gradual and limited’.

Money managers now believe there is a 50% chance of a rate increase by May 2018, up from 12% before yesterday’s meeting.

Interest rates

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What the hung parliament means for business

Houses of Parliament

The political arena has sprung a series of significant surprises on us in recent months, including the vote for Brexit, David Cameron’s speedy resignation and replacement by Theresa May as PM, and Donald Trump being elected in America.

And now – at a time when the Conservatives seemed unbeatable – Mrs May held a snap General Election with the intention of boosting the Tory majority, and instead has ended up with a minority and coalition talks with the DUP.

The bad news is that a hung Parliament leads to uncertainty for all.

Impact of a hung Parliament

Because of the hung Parliament, the Brexit negotiations that were due to start on 19 June have now been delayed. The Queen’s Speech has also been delayed. And the value of pound is still volatile (this links to last week’s article, Pound down, inflation up).

At the time of writing, Mrs May has reshuffled her cabinet and said she has no intention of resigning. But there is speculation that she will be forced to step down and/or we’ll be voting in another General Election within a year.

All this upheaval and uncertainty seems to weaken the British position in the eyes of the rest of the world. It’s hard for other countries to see us as ‘strong and stable’ as we’d like to be.

Various organisations have been ‘taking the temperature’ of the business world, to see how UK industry leaders are responding to the uncertainty. Below, we examine some of the results.

What the surveys say

The Institute of Directors surveyed 700 members and found a ‘dramatic drop’ in confidence following the hung Parliament, and huge concern over political uncertainty and its impact on the UK economy.

As a priority, the respondents wanted the UK to reach agreement with the EU on transitional arrangements for Brexit, and to clarify the impact on EU workers in the UK.

Stephen Martin, Director General of the IoD, said: “It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy.”

The Harvard Kennedy School of Business surveyed more than 50 medium-sized businesses and trade association. Their key concerns were:

  • The overwhelming importance of securing a good trade deal with the EU
  • The concern that Brexit would lead to an increased regulatory burden not a reduction
  • The need for continued engagement with EU regulatory agencies
  • The fact that Brexit will necessarily trigger a fundamental rethink of policy towards some sectors, in particular agriculture
  • The need to upgrade customs control procedures and revamp the immigration system

‘Almost all’ expressed a preference for remaining in the single market and customs union. All the companies questioned were concerned about potentially rising costs from tariffs and customs controls while many were worried about the UK leaving the EU without a deal at all.

Peter Sands, former boss of investment bank Standard Chartered, told the BBC: “When it comes down to it, most would prefer to be in the single market – that makes it easier for them to do business, and if they can’t get that they want a free trade agreement or something as close to the single market as possible.”

We know it’s possible. For example, Israel has a special relationship with the EU since 2000 as an ‘associated state’. With its high level of scientific and research capability, Israel has a long-standing history of scientific and technical co-operation with the EU. With this type of status, the UK’s strong scientific community could continue to deliver EU access to British innovation.

The Resolution Foundation surveyed over 500 employers who employ EU/EEA nationals, and identified a huge gap between the kind of immigration system employers expect and what the new government is planning.

Nearly a third (30%) expect freedom of movement to be maintained for EU/EEA nationals moving to the UK with a job offer, while 17% expect no change to the current system.

The PM has ruled out either option, stating that her government – rather than employer demand for workers – will control migrant numbers. However, this may change now that a softer Brexit is being proposed post-election.

The Foundation warned that lower migration, along with a higher minimum wage and a tightening jobs market, could mean the end of cheap labour for many UK firms.

Changing face of Parliament

There’s still some way to go, but the good news is that Parliament is more diverse than ever. The BBC breakdown shows (out of a total of 650 newly elected MPs):

  • 208 women, compared with 191 in 2015
  • 52 people from ethnic minorities, an increase from 41 in 2015
  • 45 who openly define themselves as lesbian, gay, bisexual or transgender (LGBT), a 40% increase since 2015
  • An increase in the number of MPs with disabilities (no official figures)
  • 51% went to comprehensive schools, 29% went to private school, 18% selective states

There will be more on diversity in a future article.

What can SMEs do?

The way things are going, there’s no way of predicting how the situation will play out over the long-term. In fact, it’s currently changing on a daily basis. In the short-term, SMEs will no doubt attempt to carry on business as usual. Here are some tips:

  • Companies large and small are pondering their investment decisions. Use AkoniHub to find the bank with the best interest rate. That way, your business deposits will grow faster, while the politicians sort themselves out
  • Focus on building your pipeline and business confidence. In the here and now, many firms across the UK have been doing well
  • Understand the key threats and opportunities that lie ahead
  • The future of devolution is an important consideration in business planning. So review the impact of further volatility in sterling as firms weigh up their business models and plans to invest or recruit.

For the vast majority of companies in the business communities we visit, Brexit feels far away and far off — what matters are the high upfront cost of doing business, poor broadband, the inability to recruit successfully for vacancies or transport gridlock. Different regions may also have their own view. In many parts of England, upcoming elections for new city/regional mayors whose powers matter to local business success could overshadow anything that happens in the national polls.

In the British tradition, let’s all try to keep calm and carry on. The UK must be seen to remain open for business, with a government committed to supporting enterprise. This means a clear timetable and ongoing pressure via industry bodies and associations for value add.

Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com

How Brexit will impact SMEs

Theresa May triggered Article 50 on 29 March, starting the two-year process of the UK’s withdrawal from the European Union.

We’ve entered into an age of uncertainty – but SMEs can’t put growth plans on hold and adopt a ‘wait and see’ approach. Business continues as usual. Stock markets and inflation are holding steady, and Treasury predictions for growth remain the same as before the referendum.

Threats

SmallBusiness.co.uk says: “Small businesses are the lifeblood of the UK economy. Falling GDP will have a large impact on small businesses in terms of the overall activity of businesses and consumers buying their products or services…Small businesses are also more susceptible to shocks since they generally have a lower field of operation.”

  • Buying goods and services from other countries is now more costly. A weak pound is bad for the UK since we buy more from overseas than we sell
  • If prices rise faster than wages, consumers will start to spend less
  • Tariff-free trade with EU countries accounts for 44% of UK exports, so the cost of doing business with these clients has increased

The right of EU nationals to live and work in the UK is unclear, which may drive recruitment of UK workers and increased labour costs.

The Adviser Lounge warns: “If the cost of hiring skilled labour increases, the financial cost of Brexit to small business could prove too much to bear.”

Opportunities

Brexit undoubtedly brings threats, but it also presents opportunities.

Felicia Meyerowtiz-Singh, CEO and co-founder of Akoni says: ” Brexit and uncertainty also provide opportunities for revenue and business growth for UK business.”

  • Exporters are already benefiting from the fall in the value of the pound against the dollar and euro
  • The UK tourism industry should benefit, with an increase in staycations and visitors from overseas
  • Some employers anticipate potential relaxation of EU employment laws

So what can you do?

The world is changing faster than ever, with a combination of the digital revolution and economic uncertainty.

Here are some tips  from the Akoni team.

  • It’s easier for small organisations to remain flexible and adaptable. Demonstrate agile leadership and become comfortable with uncertainty and change. Don’t worry about what you can’t control, but plan for relevant risks that you can mitigate.
  • Streamline your systems and processes, such as the internal flow of information.
  • Identify the skill sets and attitudes you need, and train your people accordingly.
  • Maintain focus on customer satisfaction, monitoring social sentiment and improving your value proposition and customer journey.
  • Make use of new technology such as the cloud. Monitor data for trends and use it as a guide to threats and opportunities. Turn data into visuals that can be easily analysed and transformed into  good decisions and useful outcomes.
  • With a grasp of core financials, the CFO plays a key role of oversight, guiding the business in the right direction both short-term and long-term.

And finally, here are some ideas from other sources:

HSBC suggests: “We will need to improve in an area in which we have consistently under-performed: supplying the world’s fastest-growing economies in Asia and Latin America.”

SmallBusiness.co.uk says: “Small business should be looking to do everything they can now to protect themselves from future shocks… Diversifying out of, or into different markets might make sense…and now is the time to open dialogue with suppliers about pricing.”

Real Business advises: “By developing employees, you’ll have a more confident, motivated and proactive workforce who feel more positive about the future, and who are better placed to handle whatever comes along…Review your operation and pinpoint there there may be the opportunity to work with other similar-sized businesses who are experts in their field…Be as transparent as possible and involve staff in updates about the business where appropriate. This will foster strength and build trust amongst the team, which will be invaluable if the business hits any bumps further down the road.”

Change is here to stay. Whatever happens, Akoni will be here to help and advise.

Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com

The last-ever Spring Budget: The business impact

On 8 March, Chancellor Philip Hammond delivered his final spring budget. From 2017, the budget will be moving to the autumn, with a spring statement instead. The intention is to allow more time for changes to be made before the next tax year.

Key points

Here are some of the key points that were announced:

  • Growth in the UK economy picked up through 2016, and the Office for Budget Responsibility (OBR) forecasts that the UK economy will grow by 2% in 2017, at a slightly slower rate in 2018, and then up to 2% in 2021
  • Britain’s debt stands at nearly £1.7 trillion – around £62,000 for every household in the country. In 2009-10 the UK borrowed £1 in every £5 spent. This year it is set to be £1 in every £15. Borrowing is forecast to reduce by nearly three quarters by 2016-17.
  • Employment has reached a record high of 31.8 million people

How the Budget affects SMEs

Here are some of the ways that SMEs and start-ups will be affected by the recent announcements:

  • There is a cut in dividend allowance for company shareholders
  • If you are an unincorporated business with an annual turnover below the VAT registration threshold, Making Tax Digital will become mandatory in April 2019 – after that, you will have to use digital software to keep your tax records and update HMRC every quarter
  • Self-employed people will have to pay increased National Insurance Contributions to bring them closer into line with employed people. From 2018, Class 2 NICs will be abolished. Class 4 NICs will rise to 10% in April 2018 and to 11% in April 2019.
    Update 15 March: The government has announced a U-turn on self-employed VAT, as explained in this BBC report.
  • Small businesses with minimal expenses (less than £2,000 a year) will now have to pay 16.5% under the Flat Rate VAT scheme

Rising business rates

We’ve written about rising business rates before, but here are some of the ways the Chancellor is sweetening the pill:

  • Business rates are increasing for certain sectors, especially the digital economy – but no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year compared with 2016-17
  • Local authorities have been granted £300 million of discretionary relief they can use to help businesses most affected by the revaluation
  • From April 2017, pubs with a rateable value up to £100,000 will be able to claim a discount for of £1,000 on their business rates for one year

Consumer protection

Your business may be fined if you mislead or mistreat consumers. For example, if you charge consumers unexpectedly when a subscription is renewed or a free trial ends, or if your terms and conditions are too long, complicated or jargon-filled.

Investment in innovation

The Chancellor confirmed the government’s support of innovation, highlighting the Research and Development (R&D) tax credit scheme. They aim to improve awareness of the scheme among SMEs, and make administrative changes to increase the certainty and simplicity around claims.

£500 million is to be invested in technical education for 16 to 19-year-olds, with new T-levels being introduced from autumn 2019 covering 15 different subjects including construction, digital and agriculture. Students doing high-level technical courses at National Colleges and Institutes of Technology will be able to access maintenance loans from the government.

£270 million has been allocated to the Industrial Strategy Challenge Fund, to support research and innovation in:

  • Artificial intelligence and robotics that will work in extreme environments
  • Better batteries for electric vehicles that will help improve our air quality
  • Medicine manufacturing technologies to speed up patient access to drugs

£210 million will create new fellowships and programmes to attract top global talent to conduct research in areas such as bioscience and biotechnology, quantum technologies, and satellite and space technology.

£200 million is going towards local projects to build fast and reliable full-fibre broadband networks.

£90 million will provide 1,000 new PhD places, including in science, technology, engineering and maths.

£16 million is being invested into a national 5G Innovation Network to trial new 5G technology.

EIS tax relief

It has previously been indicated that the government will be reviewing existing tax reliefs aimed at encouraging investment and entrepreneurship (such as the EIS) to ensure that they are “effective, well targeted, and provide value for money”, however, Philip Hammond didn’t mention any change to Enterprise Investment Schemes at this stage.

We can only wait and see…

Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com

How Wednesday’s budget could affect SMEs

The final Spring Budget is on 8 March. From next year the Budget is moving to Autumn, with a Spring Statement. This change gives time for tax changes to be made in advance of the tax year, and provides businesses with more time to plan, if necessary.

Forecasts are showing sharp growth with borrowing lower than anticipated, and a £45 billion tax windfall for the Treasury in the next five years. January’s tax receipts are at the highest level since 1999, but Chancellor Philip Hammond is quoted as saying: “There is no pot of money under my desk.”

In this article, we’ve compiled some of the main predictions that will impact you and your business, and look forward to hearing what is announced on Wednesday.

Business rates

According to reports, some firms face increases of up to 400% in the April business rates hike.

The Chancellor has recently indicated that he is “alive” to the impact this have on some High Street shops, and “open” about finding ways to help.

Business rates are a property tax that doesn’t apply in the digital economy, and the Government is trying to ensure that online retailers such as Amazon don’t benefit to the detriment of traditional High Street retailers.

We expect he will announce some immediate measures that will mitigate the worst effects on SMEs (such as transitional relief), with more fundamental reforms to come in the future. No additional help is expected for supermarkets and corporations.

Misleading contracts

Companies that mislead or rip off consumers are to be targeted, because Ministers want to force firms to use plain English and make key terms more obvious. If not, they face a fine.

The Citizens’ Advice service estimates that 2 million consumers per year have problems cancelling subscriptions, and research shows that 42% of people are paying for at least one subscription they don’t use, such as gym membership.

Consumer watchdog Which? found that 90% of people ticked to agree with online T&Cs in the past year but only 16% always read them. For one thing, T&Cs are often very long, for example, contracts for mobile phones can run up to 40,000 words. They also contain acronyms and legal or financial jargon that mean people don’t fully understand what they are signing.

Plans will be therefore be unveiled to fine companies that tie people into long contracts or unexpected fees in their terms and conditions.

There may also be a crackdown on rolling subscriptions that renew automatically after a free trial, with new rules to ensure consumers are offered the chance to cancel the agreement.

Science and innovation boost

The Chancellor is expected to announce a £500 million boost from the National Productivity Investment Fund, to support science and technology.

Around £270 million will be made available for pioneering projects such as:

  • Technology that operates in extreme and hazardous environments
  • Cutting-edge artificial intelligence
  • Robots for off-shore and nuclear energy, space and mining
  • Batteries for the next generation of electric cars
  • Accelerating patient access to new drugs, by developing speedy new ways to manufacture medicine

£200 million will go towards new fellowships for researchers in areas aligned to the government’s industrial strategy.

A further £90 million will fund 1,000 PhD research projects in STEM subjects (Science, Technology, Engineering and Mathematics), with extra cash for investment in 5G communications.

Brexit

British businesses are calling for economic stability during the Brexit negotiations. The Confederation of British Industry says that uncertainty dampens investment and higher inflation erodes the growth in consumer spending.

Carolyn Fairbairn, Director-General of the CBI, said: “By supporting businesses to invest, the government can promote growth at a critical time.”

Rain Newton-Smith, CBI chief economist, said: “Prioritising stability will inject further confidence in the economy now, and help boost the country’s productivity and prosperity for the future.”

Anything is possible after Article 50 is triggered at the end of March. Bigger measures are likely to be reserved until the Autumn Budget, so the Chancellor can see how the economy reacts. Meanwhile, we know he is aiming to keep a pot of money as a safety net, to ensure the country negotiates Brexit with stability.

As always, Akoni will keep you posted.

Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com