Business

Local businesses to benefit from Supreme Court insurance ruling

Published

4 years ago

January 15, 2021

THE SUPREME COURT has largely ruled in favour of policyholders and the City regulator in the landmark business interruption insurance case.

In a judgment handed down today, the court said it “substantially allowed” the appeal by the Financial Conduct Authority (FCA) and campaign groups Hiscox Action Group and Hospitality Insurance Group Action.

Tens of thousands of small businesses will receive insurance pay-outs across the UK covering losses from the first national lockdown. There are thought to be hundreds of businesses in Pembrokeshire which will benefit from the ruling.

One of the judges, Lord Briggs, said in the ruling: “On the insurers’ case, the cover apparently provided for business interruption caused by the effects of a national pandemic type of notifiable disease was in reality illusory, just when it might have been supposed to have been most needed by policyholders.

“That outcome seemed to me to be clearly contrary to the spirit and intent of the relevant provisions of the policies in issue.”

The insurers Arch, Argenta, Hiscox, MS Amlin, RSA and QBE, have had their appeals dismissed.

The ruling will provide guidance for a further 700 policies, potentially affecting up to 400,000 policyholders.

Richard Leedham, partner at Mishcon de Reya who represents the Hiscox Action Group today said: “The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid.”

“The hope and expectation of our clients is that the claim adjustment process starts immediately and that insurers will not continue to cause further distress by further unnecessary delay.”

Following today’s decision the insurance industry is expected to pay out over £1.8bn in coronavirus claims related to the first lockdown, which includes business interruption policies.

The FCA, which brought the test case, said: “We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible.”

Huw Evans, director general of the Association of British Insurers (ABI) confirmed insurers would settle claims as soon as possible.

“Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim. All valid claims will be settled as soon as possible and in many cases the process of settling claims has begun,” he said after the judgment.

Business

Slower contractions in Welsh business activity and orders in December

Published

32 mins ago

January 10, 2025

Tom Sinclair

WEAKER declines in output and new orders Firms remain optimistic for 2025 Employment falls at fastest rate since September 2020

The latest Cymru Growth Tracker from NatWest highlights a slower pace of decline in business activity and new orders for Welsh companies in December 2024.

The Wales Business Activity Index, which measures month-on-month changes in output across the manufacturing and service sectors, rose to 48.9 in December from 47.7 in November. While still below the 50.0 threshold that indicates growth, the latest reading signaled the slowest contraction in the current four-month downturn.

The softer decline in output was underpinned by only a slight fall in new orders. Welsh firms expressed optimism for increased activity in the year ahead, although concerns over economic uncertainty, rising costs, and selling prices tempered expectations.

Employment and Cost Pressures

Despite improved business activity, subdued demand, spare capacity, and heightened cost pressures led to the sharpest drop in employment since September 2020. Redundancies were driven by cost-cutting initiatives and lower sales, with voluntary leavers not being replaced.

Although firms managed to increase selling prices at the fastest rate since May 2024, business confidence slipped to a 13-month low.

Jessica Shipman, Chair of the NatWest Cymru Regional Board, commented:

“Welsh businesses saw a slightly brighter end to 2024 as contractions in output and new orders eased. Success in engaging new customers helped slow the decline in new business, and firms are cautiously optimistic about 2025. However, the pace of job cuts accelerated, and rising costs—particularly wages—pose ongoing challenges to margins.”

Comparing Wales to the UK

The performance of Welsh businesses contrasted with modest growth across the UK. While Wales recorded slower declines, the pace of contraction in business activity remained more pronounced than the UK average.

New orders also fell for a second consecutive month in December, though the decline was among the weakest of the ten UK regions experiencing downturns. Optimism among Welsh firms about future output fell to its lowest level since November 2023, lagging behind both the UK average and historical trends.

Inflation and Pricing Trends

Input costs at Welsh firms rose at their fastest pace since April 2024, driven by higher supplier prices, rents, and wage bills. The rate of cost inflation was slightly below the UK average, but the pressure remained historically high.

In response, businesses raised selling prices at the quickest rate since May 2024. Despite this, Wales saw one of the slower increases in charges among the 12 UK regions, with only Yorkshire & Humber, Northern Ireland, and the West Midlands recording weaker upticks.

Employment and Backlogs

Welsh private sector firms reported the steepest job cuts of all UK regions, with staffing levels falling at the fastest rate since September 2020. Similarly, incomplete work declined at the quickest pace among the monitored UK areas, reflecting subdued demand and increased spare capacity.

Business

Government unveils £2.5bn Steel Strategy to revitalise UK steelmaking

Published

21 hours ago

January 9, 2025

Tom Sinclair

THE UK Government has announced the creation of a new Steel Council, backed by up to £2.5 billion in funding, to secure the long-term future of steelmaking and protect steel communities across the country.

Chaired by Business Secretary Jonathan Reynolds and Jon Bolton, Chair of the Materials Processing Institute, the council brings together industry leaders, trade unions, and representatives from devolved governments to address challenges and develop a robust Steel Strategy.

Business Secretary Jonathan Reynolds said: “The industry and steel communities have had enough of lurching from crisis to crisis – this government will take the action needed to place steel on a secure footing for the long term. With the launch of the Steel Council, we’re placing workers and local communities at the heart of our plans as we bring forward £2.5 billion investment to secure growth right across the country.”

The council, which held its first meeting on January 7, will act as a critical link between the Government and the steel industry. It aims to foster collaboration and ensure the workforce is central to plans for rebuilding the sector.

Safeguarding a crucial industry

The Steel Council includes key players such as Tata Steel, British Steel, and trade unions like Community and GMB. Its primary focus will be to support the upcoming Steel Strategy, which is expected to be published in spring.

Gareth Stace, Director-General of UK Steel, said: “The establishment of the Steel Council marks a defining moment for the future of steelmaking in Britain. This strategy is a once-in-a-generation opportunity to foster a competitive business environment that encourages long-term investment and ensures steelmaking remains at the heart of the UK economy.”

Jon Bolton, co-chair of the council, echoed this sentiment: “The UK has all the essential elements to attract investment into the steel industry: demand, skills, technology, unrivalled research and development, and, critically, a supportive government. The council’s task is to detail the investment plan and establish a roadmap towards a rejuvenated, competitive, and environmentally progressive industry.”

Commitment to economic growth and national security

The Government has emphasised the importance of the steel industry to both national security and economic growth. The Steel Council will continue to meet regularly following the launch of the Steel Strategy to ensure the effective use of the £2.5 billion funding.

Full Steel Council membership includes:

Jonathan Reynolds, Secretary of State for Business and Trade (Chair)
Jon Bolton, Chairman of the Materials Processing Institute (Co-chair)
Sarah Jones, Minister of State for Industry and Decarbonisation
Representatives from Tata Steel, British Steel, Liberty Steel, and other major steel companies
Trade unions: Community and GMB
Devolved government representatives from Scotland, Wales, and Northern Ireland

The Government’s Plan for Change aims to transform the steel sector into a sustainable and innovative industry while safeguarding jobs and economic stability for steel communities nationwide.

Business

5.4 million yet to file tax return – HMRC issues a warning

Published

22 hours ago

January 9, 2025

Tom Sinclair

NEARLY 25,000 taxpayers began the new year by completing their Self Assessment tax returns on January 1, HM Revenue and Customs (HMRC) has revealed. An additional 38,000 individuals submitted their returns on December 31, with 310 filing just before midnight.

With less than a month until the January 31 deadline, HMRC warns that 5.4 million people still need to file their returns to avoid penalties. Filing and paying on time supports public services and the government’s economic stability initiatives.

Avoid Penalties by Filing on Time
Failing to meet the January 31, 2025, deadline for the 2023-24 tax year could result in an initial penalty of £100. Additional charges apply for prolonged delays:

After three months: £10 daily fines up to £900.
After six months: 5% of the tax owed or £300, whichever is greater.
After 12 months: A further 5% or £300, whichever is greater.

Late payments also incur a 5% penalty after 30 days, six months, and 12 months, plus interest on unpaid amounts.

Myrtle Lloyd, HMRC Director General for Customer Services, urged taxpayers to act promptly:

“Completing your tax return may not be the most exciting task, but filing and paying on time is essential to avoid penalties or interest charges. The easiest way to do this is via our online services on GOV.UK.”

Support for Taxpayers
Around 97% of taxpayers now file online, benefiting from features such as saving progress and returning later to complete their submissions. Payments can also be made securely through the HMRC app, which includes reminders for deadlines.

For those struggling to meet the deadline, HMRC advises contacting them before January 31 to discuss reasonable excuses.

Who Needs to File a Tax Return?
Taxpayers must complete a Self Assessment if they:

Are newly self-employed and earned over £1,000.
Earned below £1,000 but wish to pay Class 2 National Insurance Contributions.
Became a partner in a business partnership.
Received untaxed income exceeding £2,500.
Receive Child Benefit and must pay the High Income Child Benefit Charge due to earnings above £50,000.

Beware of Scams
HMRC warns taxpayers to remain vigilant against fraud. Criminals often use emails, texts, or calls to steal personal and financial information. Taxpayers can verify suspicious communications by searching “HMRC tax scams” on GOV.UK.

For more information, resources, and step-by-step guidance, visit GOV.UK or watch HMRC’s tutorials on YouTube.