Dear All,
Detailed below is the Weekly News/Covid 19 update for 28th September.
There is a roundup of recent events, regarding Covid 19 and Brexit.
Have a good week.
Gordon Polson
Chief Executive – Federation of Bakers Ltd
FOB Chief Executive’s Weekly News for 28th September 2020
Barclays Economic Update:
UK Flash Composite output index decreased to 55.7 in sep’20
According to data published by ihs markit⁄cips, UK flash composite output index decreased to 55.7 in sep’20 from 59.1 in aug’20. The sep’20 figures indicated a setback for the recovery in the UK private sector, with slowdown in both manufacturing production and service sector activity.
The seasonally adjusted ihs markit⁄¢ips UK flash manufacturing purchasing managers’ index (pmi) decreased to 54.3 in sep’20 from 55.2 in aug’20. Output and new business growth both reduced in sep’20 compared to the previous month. However, export sales have increased during sep’20, primarily due to increasing demand from Asia.
The seasonally adjusted ihs markit⁄cips flash UK services pmi business activity index decreased to 55.1 in sep’20 from 58.8 in aug’20. Some service providers reported continued recovery in business activity in sep’20, supported by improved housing market conditions, rising demand for digital services and an increase in domestic tourism. However, large parts of the service sector continued to experience the impact of covid-19 on business activity, particularly those operating in transport services, international travel, hospitality and consumer-facing areas.
The report indicated that business optimism continued to decrease across the UK private sector in sep’20, due to concerns around covid-19, Brexit and a subdued forecast for the global economy.
Eurozone Flash PMI Composite output index decreased to 50.1 in sep’20
According to data published by ihs markit⁄cips, flash eurozone pmi composite output index for sep’20 decreased to 50.1 compared to 51.9 in aug’20. The report indicated a marginal increase in business activity, with growth in the manufacturing sector offset by a downturn in the service sector.
In terms of sector, flash eurozone manufacturing pmi output index for sep’20 increased to 56.8 compared to 55.6 in the previous month, while flash eurozone services pmi activity index for sep’20 decreased to 47.6 compared to 50.5 in the previous month.
In terms of regional output, Germany led the recovery, with a significant increase in manufacturing output. However, the rate of growth slowed due to a decline in services activity in the region. Meanwhile, France reported a decline in sep’20 for the first time in four months, with a decrease in the service sector output surpassing a modest increase in factory production.
Chris Williamson, Chief Business Economist at ihs markit, stated that eurozone economic recovery was inhibited in sep’20, as increasing covid-19 infections led to a reinstated downturn in service sector activity across regions.
UK Manufacturing Orders Slowed in sep’20
According to the industrial trends survey by the Confederation of British Industry (CBI), UK manufacturing firms recorded a slowdown in order volumes in sep’20, for the first time since apr’20.
The survey of 277 manufacturers indicated that output volumes declined in 10 of 17 sub-sectors in sep’20, with the decline primarily driven by the motor vehicles & transport equipment sub-sector.
The order books decreased by 48% in sep’20 compared to 44% in aug’20. The order books remained lower than the long-term average of 14%. However, manufacturing output during the three-months to sep’20 decreased by 20%, at a slower rate in comparison to 46$ during the three-months to aug’20.
Anna Leach, Deputy Chief Economist at CBI, stated that while the output volumes decreased at a slower pace in sep’20 than aug’20, low demand levels have impacted the order books. She further added that the government should increase its support for manufacturing firms as they face headwinds from the resurgence of covid-19.
Restrictions on the Hospitality Sector Could Impact Food Manufacturers
According to food trade associations, the restrictions placed on the hospitality sector in response to increasing cases of covid-19 are anticipated to have a significant impact on food manufacturers.
Food manufacturers have been impacted by the closure of the out-of-home sector during the covid-19 pandemic, with stocks being diverted to the grocery sector, supplied directly to consumers and donated to charity.
Ian Wright, Food and Drink Federation, stated that the new restrictions on the UK hospitality and foodservice sector will impact food manufacturers, particularly the ones involved in supplying the hospitality sector.
Richard Harrow, Chief Executive Officer at the British Frozen Food Federation, stated that grocery retailers and the food supply chain is prepared with the food supplies and there is no need for panic buying.
Winter Economy Plan:
A new Job Support Scheme to protect the jobs of millions of people returning to work, extending the Self-Employment Income Support Scheme, extending the VAT cut (from 20% to 5%) for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.
Further information on these new schemes is available in this email and on GOV.UK, by searching ‘Winter Economy Plan 2020’.
Our phone lines and webchat are very busy, so the quickest way to find the support you need is on GOV.UK. This will leave our phone lines and webchat service open for those who need them most.
Job Support Scheme
A new Job Support Scheme will be introduced from 1 November to protect jobs where businesses are facing lower demand over the winter months due to coronavirus (COVID-19).
Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
You will continue to pay the wages for the hours your staff work. For the hours not worked, you and the government will each pay one third of their usual wages (capped at £697.92 per month). You will need to meet your share of the pay for unworked hours and all your National Insurance contributions and statutory pension contributions, from your own funds. This means that employees will receive at least two thirds of their usual wages for the hours not worked.
To be eligible, employees must:
- be registered on your PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020
- work at least 33% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme.
Further eligibility criteria is available on GOV.UK by searching ‘Job Support Scheme factsheet’.
The Job Support Scheme will be open to employers across the UK even if you have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which closes on 31 October.
The Job Support Scheme will start from 1 November and you will be able to claim in December. Grants will be paid on a monthly basis.
The scheme will operate in addition to the Job Retention Bonus. You and your employees can benefit from both schemes in order to help protect viable jobs.
For information on what is covered by the grant, which employers and employees are eligible, and how to claim, search ‘Job Support Scheme factsheet’ on GOV.UK.
Extension to the reduced rate of VAT for Hospitality and Tourism
The government has extended the temporary reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and will now end on 31 March 2021 across the UK.
VAT Deferral New Payment Scheme
If you deferred payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31 March 2021. You can use the New Payment Scheme to spread these payments over equal instalments up to 31 March 2022. Alternatively, you can make payments as normal by 31 March 2021 or make Time To Pay arrangements with HMRC if you need more tailored support.
New Self Assessment Self-Serve Time To Pay Scheme
If you deferred paying your July 2020 Payment on Account, you will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 31 January 2021. This may be a larger payment than you usually pay in January.
If you’re unable to pay your Self-Assessment (SA) bill in full by 31 January 2021, you can set up a Time to Pay payment plan of up to 12 months online without speaking to us. If you have SA tax debts of up to £30,000, you’ll able to access this Time to Pay facility through GOV.UK and will get automatic and immediate approval. If your SA debts are over £30,000, or you need longer than 12 months to repay your debt in full, you will still be able to use our Time to Pay arrangement by calling HMRC.
Other business support schemes:
Changes to CJRS – what you need to do from 1 October
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
You will continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.
You’ll also continue to pay your furloughed employees’ National Insurance and pension contributions from your own funds.
Work Canteen Q&As
I received these further details from DHSC via Defra on some of the questions posed by members.
In particular the requirements for QR code posters and registration Full details below. Please note that I am expecting further information on the definition of a work canteen and that as previously advised the rules regarding hours of opening do not apply to work canteens.
Face coverings-We got a very helpful answer which made clear the objective is premises which deal with the public but I am not clear how we would deal with contractors-is it the contractors who need to wear a mask. The canteen staff will already be in a covid safe environment typically behind screens.
Contractors will usually be treated the same way as staff in terms within the face coverings legislation—requirements that apply to staff apply to contractors, and exemptions that apply to staff also apply to contractors. In legislation these are listed under 3(2)(b) “a person responsible for a relevant place or an employee of that person acting in the course of their employment” and 3(2)(c) “any other person providing services in the relevant place under arrangements made with the person responsible for the relevant place”. All of the requirements and exceptions so far apply to both 3(2)(b) and 3(2)(c) identically.
Serving at Tables-I think we can safely assume that does not apply.
Agree – Workplace canteens which are not accessible to the public are not covered by these requirements. Staff must eat and drink at tables but can queue and collect food from a counter.
QR Code posters -Are they aimed at the usual work staff or again is this members of the public? Advice so far is that QR posters are required in all canteens. That needs to be clarified. I have a question of what is the definition of a canteen. Some ‘canteens’ are only vending machine areas, perhaps out of hours. Do they need a QR code poster and again what is the status of contractors re QR codes.
Yes, work place canteens are in scope whether they are for staff, contractors or are public. It does not matter whether the owner thinks they are covid secure and thinks everyone is social distancing, pubs and restaurants would argue they are too but all these settings are included in scope for a reason – because people come together and mingle and there is ‘dwell’ time. They are not exempt and they will need to adhere to these requirements.
In terms of the frequency, the guidance states that Venues in hospitality, the tourism and leisure industry, close contact services and local authority facilities must keep a record of all staff working on their premises and shift times on a given day and their contact details.
The purpose of the displaying an official NHS QR code poster so that customers and visitors can ‘check in’ using this option as an alternative to providing their contact details. Business must register for an official NHS QR code and display the official NHS QR poster. We will follow up on the canteen definition question.
Covid Update Summary: Please find below the link to the updated guidance regarding working safety during Coronavirus.
https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19
To highlight that there are update within the following sections:
Restaurants, pubs, bars and takeaway services
Updated guidance on legal requirements for businesses (section 1), mandatory table service at licenced venues (section 2.2), working from home (section 3), supporting staff to self-isolate (section 3.2) and mandatory face coverings for staff and customers (section 6.1).
Factories, plants and warehouses
Updated guidance on working from home (section 2) and supporting staff to self-isolate (section 2.2).
Updated guidance on working from home (section 2) and supporting staff to self-isolate (section 2.2).
Updated guidance on working from home (section 3), supporting staff to self-isolate (section 3.2) and mandatory face coverings for staff and customers (section 6.1).
Brexit Updates:
Brexit – preparations for end of transition period
The Government’s preparations for the end of the EU-UK transition period on 31 December, with no confirmation of a EU-UK free trade agreement (FTA) in sight, reached a new milestone this week with the publication of the Government’s “reasonable worst case scenario” planning assumptions and arguments between the Government and hauliers about what to expect. We have now reached the somewhat extraordinary position where port-bound UK hauliers will need a permit to enter Kent. The Cabinet Minister, Michael Gove, confirmed this week that the Government’s “no deal” preparations include plans for a “Kent access permit”. It is intended to prevent any port-bound lorry without the correct paperwork for travelling to the EU from entering Kent, in order to avoid long traffic queues of thousands of lorries in the County. The permit will be enforced by number plate recognition technology and police officers. The Shadow Cabinet Minister, Rachel Reeves, asked why the long list of Government commitments in a letter sent to hauliers this week, which she described as “essential prerequisites for a smooth transition”, are not already in place. Noting that the “Conservatives have had 3 Prime Ministers and 4 years since the (EU) referendum in 2016” she criticised “serial incompetence and countless U-turns” and urged the Government to “get a grip on preparations” now. Mr Gove insisted that the information that businesses need to prepare for the end of the transition period is available and he urged them to act on it.
EU-UK negotiations on “third country” listing status for UK
The Labour Shadow Defra Secretary, Luke Pollard, has questioned the Government on the timeline of its negotiations with the EU for third country status and agreement to export fish and fish products; and the progress of that application. In response the Defra Minister, Victoria Prentis, said that the UK’s application for third country listing for live animals and products of animal origin was submitted 27 March 2020. On 16 June 2020 the EU requested further information on the UK legislation and the sanitary and phytosanitary (SPS) rules that will apply from 1 January 2021. The UK responded to the Commission on 20 July 2020. Ms Prentis also pointed out that the UK successfully gained listing previously (prior to EU exit dates) and there has been no change to the UK’s status (in terms of animal disease). On this basis the UK Government remains “confident of achieving listed status”. The UK application, including the evidence dossiers will be discussed by Member States at the EU Committee on Plants, Animals, Food and Feed (SCOPAFF) and the Government is expecting an update by 14/15 December 2020.
Peers debate UK approach to future relationship with EU
Peers debated the UK’s approach to our future relationship with the EU on 23 September. The debate was opened by the Cabinet Office Minister, Lord True. Several Peers, beginning with Baroness Hayter of Kentish Town, took the opportunity to express their concern that the Government’s approach to these negotiations – and in particular publication of the controversial UK Internal Market Bill (see below) – has undermined trust in the UK and jeopardised the chances of securing an EU-UK free trade agreement (FTA). Lord Lilley took a different view, explaining that he had always thought an EU-UK FTA was less likely than generally assumed, but publication of the UK Internal Market Bill led him to think the chances of reaching agreement on a FTA had risen. Lord Rooker urged the Prime Minister to reverse his current course, adopt a conciliatory approach to the EU at the EU Summit in October and seek a 2 year extension of the transition period with a view to the UK remaining in the Single Market and EU Custom Union. Responding to the debate Lord True told Lord Rooker and Baroness Wheatcroft that “there is no chance of the Government extending the transition period…that is the law of the land.”
Links to CBI Brexit Updates:
Seven Questions on the Internal Market https://www.cbi.org.uk/articles/seven-questions-on-what-the-internal-market-means-for-your-business/?utm_campaign=20200924_EU%20and%20International%20Update&utm_medium=email&utm_source=Eloqua
Brexit Policy Briefing https://www.cbi.org.uk/articles/brexit-policy-briefing-23-september-2020/?utm_campaign=20200924_EU%20and%20International%20Update&utm_medium=email&utm_source=Eloqua
HSE Weekly Update:
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