Chief Executive’s Weekly News for 20th January 2020

Dear All,

Weekly news for 20th January detailed below.

Have a good week.

 

Gordon Polson – Chief Executive

Federation of Bakers Ltd

CBI Economic Update: Highlights of this month’s Economy in brief include:

  • The last official data from last year did revised up the estimate for Q3 GDP growth from 0.3% to 0.4%. However, the monthly data from the ONS for October – the first month of Q4 – showed no growth
  • There are positives in the labour market – the employment rate is at a new record high, and both unemployment and inactivity are down on the year
  • While consumers start the year in good shape, businesses remain in a less positive position – both in the UK and globally – with persistent pressure on investment and trade
  • The escalation of tensions in the Middle East poses risks to global business confidence and oil prices.

Barclays Economic Update: marginal gains for UK productivity

Barclays’ global manufacturing confidence (GMC) index declined in dec’19 by -0.07pts concluding the year at the lowest level since mid-2009.

Global industrial activity has remained weak in q4’19 because of, direct negative impact from higher tariffs on the US & China economies and elevated trade uncertainty which hindered business investment.

The UK manufacturing PMI index declined in dec’19 to 47.5 from 49.3 in nov’19. The breakdown highlighted a major downturn in output (45.6; -3.5pts).

Furthermore, new orders decreased to 46.4 in dec’19, while new export orders remained relatively weak despite posting a negligible improvement 46.1 in previous month, reflecting rough conditions in both internal and external markets.

Meanwhile, the employment index and input prices increased marginally to 47.8 and 51.2 respectively in dec’19.

 

CBI EU and International Briefing

Last week, the government used its new 80 seat majority to vote through the Withdrawal Agreement Bill unamended. This vote approves the UK’s exit from the EU on 31 January, after which it will enter a ‘status quo’ transition period until the end of December 2020.

In early March, negotiations on the future trading relationship between the UK and the EU are expected to begin. The prime minister has re-asserted a new deal must be agreed and ratified by the end of 2020, ruling out any extension to the transition period in law. To meet the UK government’s deadline, EU officials have said a trade deal must, therefore, be negotiated, checked, translated and presented to the European Parliament by 26 November – leaving six months to conclude negotiations. Last week at the London School of Economics, the new European Commission chief, Ursula von der Leyen, described the timetable to strike a replacement trade deal as “extremely challenging.”

To help business’ kickstart their 2020 Brexit planning, Nicole Sykes, the CBI’s Head of EU Negotiations has outlined five thoughts about how 2020 may differ from 2019.

As we look at the next stage of trade negotiations with the EU and other global trading partners, it is vital that we head into this phase with the right business engagement structures in place. This week the CBI published the paper, Building a World-Leading UK Trade Policy, setting out how the government and business can work in partnership together as the UK looks afresh at its post-Brexit international trading relationships.

With a government committed by its manifesto to agree trade deals covering 80% of UK trade by end 2022, the new approach will also have implications for wider trade policy, including a trade deal for the US negotiated in parallel with an EU deal. Timescales for the roll-over of the UK’s trade deals including Canada, Mexico and Japan will be tight if the prime minister sticks to his commitment for a short transition.

The CBI continues to argue that any new trade deals need to be aligned with a close UK relationship with the EU and is working to roll over the UK’s existing trade deals through the EU.  CBI International Director Ben Digby and China Director Guy Dru Drury have just been to Japan to meet with the chief negotiator for the future UK-Japan trade deal. The CBI will also continue to keep members on top of wider events in Trade Policy, including US-China, where underlying tensions are likely to continue despite expectations that signs of a slight thaw ahead of a proposed US-China in what will be a big year in wider trade policy.

 

Agriculture Bill introduced in Parliament: The Government’s Agriculture Bill was introduced in Parliament on 16 January. It paves the way for farmers and land managers in England to be rewarded with public money for “public goods” such as better air and water quality, higher animal welfare standards, improved access to the countryside or measures to reduce flooding.  The Bill also requires the Government to report regularly on food security to Parliament. Defra Secretary, Theresa Villiers, said that safeguarding our food security would be achieved by investing in the foundations of food production, such as clean air, soils and water. In her Oxford conference speech Ms Villiers noted that “our strong British food brand is built on the high standards to which we hold ourselves”, which she described as the “backbone” of our food and drink sector, and she emphasised that “backing better standards is a core part of the Government’s approach to Brexit.  No date has been set yet for the Second Reading debate, but the Bill’s future progress can be followed via its website. The Labour Shadow Defra Secretary, Luke Pollard, has said that the party will try to amend the Agriculture and Environment Bills to ensure that “our farmers are not undercut by lower prices and lower standards on US super farms.”
Scottish Ministers express concern about impact of trade deals on UK standards
Notwithstanding the public assurances given by UK Ministers, the Scottish Government (SG) has continued to express concern that the UK Government may accede to demands from US trade negotiators to accept lower US standards on a range of goods and services. The First Minister, Nicola Sturgeon, has discussed this with the STUC this week; and the Cabinet Secretary for the Rural Economy, Fergus Ewing, has told MSPs that the SG “is extremely concerned that any proposed free trade deal might undermine our high-quality regulatory standards”. He raised the matter with UK ministers this week and “made it clear that this Government will resist vigorously any attempts to undermine the current standards.”

 

Chlorpyrifos & chlorpyrifos-methyl pesticides to be banned in Europe

The European Commission (EC) has agreed to ban chlorpyrifos and chlorpyrifos-methyl pesticides from the EU market following confirmation by the European Food Safety Authority (EFSA) of their harmful effects on human health.  This follows a decision at a meeting of the Standing Committee on Plants, Animals, Food and Feed on 6 December when Member States voted by a qualified majority to support 2 draft Implementing Regulations which do not renew the approvals of chlorpyrifos and chlorpyrifos-methyl. The EC formally adopted the Regulations on 10 January 2020, meaning that Member States must, within a month, withdraw all authorisations for plant protection products containing the active substances. A short period of grace for final storage, disposal and use (maximum 3 months) may be granted by Member States. After that, such plant protection products can no longer be placed on the market or used in the EU.

 

Is your modern slavery statement fit for purpose? Lessons from a high risk sector

 

Stronger Together and the University of Nottingham Rights Lab are pleased to collaborate to provide this one hour free webinar on Friday 14th February 2020 at 11am.

 

Presented by Andrew Phillips, co-author of the research “Modern Slavery Act Reporting in the Agricultural Sector” together with Hannah Lerigo-Stephens of the Rights Lab.

 

This research found that:

  • Companies have the opportunity to communicate their efforts through modern slavery statements but increasingly appear to be taking a tactical, ‘tick-box’ approach to their responsibilities under the Modern Slavery Act.
  • Only 41% of the UK agricultural sector is abiding by the reporting requirements of Section 54 of the Act
  • The quality of content in agricultural companies’ statements was low in 2017 but has worsened year on year

 

Facilitated by David Camp, Stronger Together founder, this webinar will cover:

  • An overview of the research findings
  • Lessons for all sectors in producing modern slavery statements
  • Key recommendations and how businesses can improve
  • Support available to help businesses address modern slavery risks
  • Questions

 

To book your place please register here.