Business

UK’s small businesses will be offered new ‘growth loans’ by the Government as part of the Prime Minister’s efforts to boost the economy.

Liz Truss made the announcement writing in yesterdays Mail on Sunday that there would be an extension of the Government’s Start-Up Loans programme – which offers support and funding to new businesses – to cover companies which have been running for up to five years.

The Start-Up scheme – which was established to help firms in their earliest stages by then Prime Minister David Cameron – has provided more than 90,000 loans since its inception in June 2012.

The loans are subject to a fixed interest rate of six per cent, and the programme provides support – and discounts on products for businesses – to those who might find it difficult to secure funds from traditional lenders.

In her article, Ms Truss says: ‘I am on the side of all those who take responsibility and do the right thing, from setting up their own businesses to working hard and aspiring for a better life for themselves and their family. Our clear plan will help them to thrive.

‘I know how hard it has been for small businesses. They are the lifeblood of our economy. When small businesses succeed, Britain succeeds too.’

Business Secretary Jacob Rees-Mogg said: ‘This Government is relentlessly focused on driving growth to create better jobs, boost wages and fund our vital public services like the NHS.

‘Encouraging entrepreneurship and new businesses to thrive is critical to growing the economy and raising living standards. From a hair salon in Wales, to a furniture business in Northern Ireland and a cake seller in the Lake District, expanding the Start-Up Loans scheme will support these small businesses through this challenging period and position them to grow – creating jobs and opportunities across the UK.’

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UK SME’s ‘to be offered growth loans’ as part of Liz Truss’s swathe of economic recovery plans

Immigration rules are set to be loosened as part of Liz Truss’s mission to boost growth.

The Prime Minister is expected to expand the Government’s shortage occupation list in order to help businesses fill vacancies by more easily recruiting overseas workers.

Ms Truss has faced industry demands for more migrant workers to be given visas to come to the UK, with labour shortages one of the main concerns voiced by employers across a range of sectors.

Businesses have been frustrated that the visa system for skilled work has not been responsive enough to shortages they have experienced.

Downing Street did not deny that the Prime Minister is planning to liberalise routes to allow foreign workers to move to the UK, as first reported in The Sun.

During her campaign for the Tory leadership, Ms Truss promised to tackle the labour shortages in farming – partly caused by post-Brexit freedom of movement restrictions and accentuated by the pandemic – with a short-term expansion to the seasonal workers scheme.

A recent Government report warned that such shortages were badly affecting the food and farming sector, often forcing farmers to cull healthy pigs and leave fruit rotting in the fields.

The seasonal workers programme, first launched in 2019, temporarily allows 40,000 overseas workers into the UK for seasonal roles in the horticulture and poultry sectors.

Truss has also told colleagues that she is keen to recruit overseas broadband engineers to support the government’s pledge to make full-fibre broadband available to 85 per cent of UK homes by 2025. It has also been suggested that she could ease the English-language requirement in some sectors to enable more foreign workers to qualify for visas.

A No 10 source said: “We need to put measures in place so that we have the right skills that the economy, including the rural economy, needs to stimulate growth.

“That will involve increasing numbers in some areas and decreasing in others. As the Prime Minister has made clear, we also want to see people who are economically inactive get back into work.”

The Government is expected to set out its plan for migration reform later this year.

It appears to be a pivot away from Boris Johnson’s stance on immigration and may anger some Brexit voters.

Ms Truss has insisted she is “unapologetic” in “focusing relentlessly on economic growth”, even if that means implementing unpopular policies.

Read more:
Truss plans to loosen immigration rules to tackle labour shortages in bid for growth

The pound fell to an an all-time low against the dollar this morning, triggering calls from the City for immediate intervention to halt the UK’s slide into a currency crisis.

Sterling dropped by 4.9 per cent to $1.0327 – its lowest level since decimalisation in 1971 – as trading opened in Asian markets for the first time since Kwasi Kwarteng, the chancellor, unveiled £45 billion of unfunded tax cuts in an emergency mini-budget on Friday.

It regained some ground to $1.0551 as trading volumes increased. In a signal that the fall is not simply an indication of continued dollar strength, the pound also fell 2.4 per cent against the euro to €1.0887.

“Sterling is getting absolutely hammered,” said Chris Weston, head of research at Pepperstone, a foreign exchange broker. “Investors are searching out a response from the Bank of England. They’re saying this is not sustainable.”

Paul Dales, of Capital Economics, said the Bank of England governor Andrew Bailey must step in today in order to restore control and credibility. The most effective move, he said, would be to implement a “large and immediate” interest rate hike of at least 100 basis points to 3.25 per cent.

“We’ve entered the part of the currency crisis where psychology takes over,” he said.

The pound has fallen by 22 per cent against the safe-haven dollar this year, and concern is mounting that sterling could reach parity with the reserve currency by the end of the year. The falling pound will push up the price of imports including energy, food and clothing, worsening the cost-of-living crisis.

Dales warned that even dramatic monetary intervention may not be enough to prevent a further slide in the value of sterling, given that: “We’re not convinced that Bailey has enough credit in the bank to pull this off.”

He also conceded that it would be difficult “from a political economy point of view” for the Bank to raise interest rates just days after the government outlined its new economic policies, adding: “And of course, higher interest rates just make the sustainability of the government’s fiscal plans even more questionable.”

Liz Truss, who has been prime minister for three weeks, has said her government was “incentivising businesses to invest and we’re also helping ordinary people with their taxes”.

Asked in an interview with CNN, the US broadcaster, whether she was “recklessly running up the deficit”, Ms Truss said: “I don’t really accept the premise of the question at all.”

After his fiscal statement, the chancellor indicated that his announcements were just the beginning of the government’s agenda designed to revive the UK’s stagnant economy.

Kwarteng said that the new administration was investigating possible further reductions in income tax and the loosening of immigration rules and other regulations. He has brushed off questions about the markets’ reaction and said he remained focused on achieving annual growth of 2.5 per cent.

The £45 billion tax-cutting package was met with alarm and unease by leading economists, some Tory MPs and financial markets. The Institute for Fiscal Studies think tank said that he was “betting the house” by putting government debt on an “unsustainable rising path”.

Shadow chancellor Rachel Reeves told media: “Instead of blaming everybody else, the Chancellor and the Prime Minister, instead of behaving like two gamblers in a casino chasing a losing run, they should be mindful of the reaction not just on the financial markets but also of the public.”

In a sign of Tory unease, George Osborne, a Conservative former chancellor, urged the government to end the “schizophrenic” policy of slashing taxes and increasing borrowing. He told Channel 4: “You can’t just borrow your way to a low-tax economy”.

“Fundamentally, the schizophrenia has to be resolved — you can’t have small-state taxes and big-state spending,” he said.

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Pound falls to record low against dollar

Two thirds of motor dealership showrooms are among the least energy-efficient workplaces and face debilitating lighting, heating and air quality bills this winter.

Investors increasingly shun businesses with the worst EPC, or energy performance certificate, ratings. The property consultancy Rapleys reckons that 3,000 of the country’s 4,500 dealership showrooms come with the worst ratings of E, F or G.

“Dealerships are typically large properties with extensive glazing requiring huge amounts of lighting, heating and compressed air,” it said. Soaring bills are not the only issue. “Come 2025, all assets must be E grade or higher to be able to be leased or transacted but there are reports that some lenders are already ignoring anything less than a B grade EPC in order to future-proof their portfolios and protect values.”

Rapleys added: “Now, with the focus on electric vehicles, traditional structures are struggling to support charging points on their existing supply, let alone the rising costs of energy.” Lee Fraine, head of sustainable buildings at Rapleys, said: “Typically car dealerships have always focused most of their investment in the brand and aesthetics of their showrooms. Now the race is on to retrofit in order to support both the future and value of these businesses.”

The big dealership chains are already struggling to grapple with the issues. Vertu, the listed Bristol Street Motors group, has warned that it would be reaching for the “off” switch, or at least the dimmer control, and start investing in solar panels. It told investors its fixed-rate energy contract expires at the end of this month. “There will consequently be an increase in the group’s cost of energy in the second half of the financial year,” Vertu said.

“An energy purchasing strategy has been developed, which includes sourcing off-grid energy solutions in order to manage the group’s exposure to energy market price volatility risks.”

Read more:
Car showrooms could be consigned to history as energy costs bite

David Beckham-backed Guild Esports has signed a huge sponsorship deal with Sky UK, in its larges agreement to date.

The online gaming giant signed a three-year agreement with the multi-media giant in the eighth revenue-generating deal signed by the company since it floated on the London Stock Exchange.

It is understood to be one of the biggest ever esports sponsorships in Europe, and will mean Sky is the official partner of Guild Esports, with the broadcaster also signing its first agreement with an esports group.

Esports gaming is a rapidly growing sector, having grown by more than 15 per cent last year, generating over £1bn revenue.

Guild Esports has said that the exact figure for the deal had not been disclosed, but it was its biggest ever agreement, and the previous highest was £4.5m.

The agreement also means Sky will get exclusive naming rights for the firm’s 9.831 sq ft office in Shoreditch, rebranded as the Sky Guild Gaming Centre.

Sky has also been appointed as Guild’s wi-fi and broadband partner, as well as its main network provider, with its branding to appear prominently on team jerseys.

As part of the deal, the two firms will also promote more opportunities for women in the industry, as Guild looks to launch an all-female team for the popular game Rocket League.

David Beckham, an investor in Guild Esports, said: “It’s great that Guild Esports has a fantastic new partner in Sky and I’m pleased to welcome them to the Guild family.”

Chief Executive of Guild Esports, Kal Hourd, said: “We are incredibly proud to welcome Sky, a media, entertainment and connectivity powerhouse, to the esports sector.”

“The partnership will allow us to invest not just in player performance, but in our long-stated goal to become a global leader for women in esports, starting with the launch of our all-female Rocket League team, encouraged by the huge success of our Valorant X team.”

Stephen van Rooyen, EVP & CEO, UK and Europe at Sky, said the media giant “transformed the way families watch TV, now we want to transform the gaming experience.”

“In esports every second counts, so Sky’s full fibre broadband will be perfect for Guild’s gaming HQ. Speed and reliability, hallmarks of Sky’s broadband service, will give the Guild team and gamers across the nation the edge over the competition.”

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David Beckham-backed esports firm signs big sponsorship deal with Sky