🗳️ This Is What UK Businesses Want From The New Government

📰 Industry News

• With the 2024 UK General Election among us, voters head to the polls. However, this year’s turnout is predicted to be notably low, with only 60-65% of voters expected to vote - down from 67.3% in 2019. (BigIssue)

• Tesla’s global sales fell for the second straight quarter despite price cuts and low-interest financing offers, another sign of weakening demand for the company’s products and electric vehicles. (The Guardian)

• Instagram’s "Made with AI" is to be replaced by a label with "AI info" after complaints from photographers about incorrect tagging of real, edited photos. (The Verge)

• British manufacturing activity growth slowed last month as ongoing disruption to shipping in the Red Sea contributed to lower demand from overseas customers. (Reuters)

• Is your business looking to grow on TikTok? The video app has put out a Back to School guide with a ton of useful information for businesses. You can check out the Back to School 2024 guide here.

🗳️ What Businesses Need from a New UK Government

The results of today's General Election are being closely watched by the nation's 5.5 million small businesses - and I for one am watching it like a hawk. Representing 99% of UK enterprises, small businesses are the foundation of our economy and society. After a turbulent few years, here’s what I conclude to be the key considerations for the government:

1. A Strong Economy Amid Challenges: We’ve heard terms like 'Strong Economy' and 'Growth' regularly on the campaign trail, but the reality is that many entrepreneurs are still dealing with the fallout from Brexit and ongoing economic challenges. The new administration needs to provide real, tangible support to help small businesses see the light at the end of the economic tunnel.

2. Supporting Innovation and Digitalisation: We need more support for innovation and going digital. The pandemic showed us just how crucial it is to be adaptable and tech-savvy. I’ve seen countless small businesses thrive by adopting new technologies and going digital - I’ve also seen plenty left behind and fail.

   The government should back technology for small businesses with greater incentives and training programs. Imagine the possibilities if more small businesses could be introduced to AI and cutting-edge tech. Imagine.

3. Reducing Barriers to Entry: Starting a business should be easier, not harder. During the pandemic, we saw a 14% increase in new businesses in the UK – that's significantly higher than the global average of 6%.

   However significant barriers still face wanting to be entrepreneurs. With people looking for financial independence, especially with the cost of living crisis and changing work patterns, the government should look to simplify the process and provide more support for these budding entrepreneurs.

4. Reducing EU Trade Friction: According to a Moore UK survey, 39% of business owners want less friction in EU trade. Simplifying trade processes can significantly benefit small businesses. This is seen as controversial and a step backwards for some, but the figures do not lie - the UK’s goods exports are down 13% since 2019.

5. Tax Cuts and Financial Access: VAT cuts is another point which is regularly raised by small businesses, along with reducing corporation tax. It’s a conversation to be had, but I’m not holding out for any big changes here. However, with high streets in decline, a review of business rates must be high on the agenda, while improving access to finance to help businesses scale and innovate is more realistic.

6. Green Growth and Net Zero Goals: Small businesses are crucial in driving green growth and achieving the UK's net zero targets, accounting for almost 50% of business emissions. Better access to finance for sustainable innovations is vital for these firms to contribute effectively.

Whatever the outcome, the new government will need to win the support of small businesses from the outset. They will likely aim to hit the ground running with their economic plans. The business community craves honesty, stable growth, and consistency.

Whether the new government can deliver on these fronts remains to be seen, but their actions in the coming months will be crucial in shaping the future for small businesses across the UK. Only time will tell if they can meet these expectations and foster an environment where small enterprises can truly thrive.

🚀 Revolut Eye UK Bank Licence Amid Record Profits

Revolut, the London-based fintech unicorn, is on the brink of securing its UK bank license. This all-in-one finance app, designed for tech-savvy users, has achieved remarkable success. Statista reports that in March 2024, Revolut had reached an impressive 40 million users - a significant leap from 1.5 million in February 2018.

Key Points:

• CEO Optimism: Nikolay Storonsky, Revolut’s CEO, is confident about securing a UK banking license after overcoming significant regulatory hurdles.

• Record Profits: The fintech giant reported a record pre-tax profit of $545 million in 2023, driven by a 95% increase in revenues and a substantial rise in user numbers.

• Regulatory Progress: Revolut resolved a key hurdle with its share structure, aligning with the Prudential Regulation Authority's requirements and boosting its chances for approval.

Why We Care:

Revolut's journey toward obtaining a UK banking license is a critical milestone for the fintech industry. Achieving this license will enable Revolut to expand its financial services, potentially offering loans and mortgages, significantly enhancing its market position. The firm's impressive profit growth and strategic financial discipline highlight its robust business model and potential for further expansion. With the UK fintech scene as strong as any, others will be watching to see how Revolut progresses, potentially paving the way for other large fintech firms to follow suit.

💷 The Real Financial Burden on UK Graduates

Recent data from the Student Loan Company (SLC) reveals that nearly 1.8 million individuals in the UK are grappling with student debts exceeding £50,000. Among them, more than 61,000 owe over £100,000, and 50 people each have debts surpassing £200,000, with the highest individual debt now standing at an astonishing £252,000. Crickey!

Buy How Has This Happened?

1. Escalating Debt Figures: The average debt for new graduates has risen to £48,470, up from less than £45,000 previously. Interest rates and prolonged courses contribute significantly to these growing balances.

2. Repayment Challenges: Despite 2.8 million people making student loan repayments in 2023/24, a considerable portion remains heavily indebted, with many unlikely to repay their loans in full due to high balances and interest rates.

3. Policy and Public Reaction: Experts and advocacy groups express concern over the burden of these debts. Personal finance expert Martin Lewis likens the debt to a "graduate tax," while the National Union of Students (NUS) criticises the lack of substantial reform in student finance policies.

The mounting student debt crisis highlights significant flaws in the UK's higher education funding system. Perhaps it’s something for the new government to look into, or maybe that’s wishful thinking. For many graduates, the prospect of repaying such large sums is daunting, potentially deterring future students from pursuing higher education.

As the UK's AI, engineering, and other key future industries grow, the need for highly trained workers will be critical. However, the burden of significant debt might discourage individuals from entering these essential fields. Addressing this issue is crucial for ensuring a steady influx of skilled professionals to drive innovation and economic growth.

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