The Commission recently launched the second round of discussions with trade unions and employers' organisations at the EU level, on how to support access to social protection for all people in employment and in self-employment.

This is yet another important step forward in making the European Pillar of Social Rights a reality on the ground, and only days after its proclamation by the European Parliament, the Council and the Commission at the Social Summit in Gothenburg.

Vice-President for the Euro and Social Dialogue, Valdis Dombrovskis, said: "The new world of work gives rise to new opportunities. People should be able to seize them and feel protected no matter what type of job they are in. This is the rationale behind the Pillar of Social Rights. We want to ensure our social protection systems are sustainable, adequate and fair. We are now consulting social partners on ways for everybody to contribute and build up rights."

Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, added: "This Commission is firmly delivering to make Europe more social. Today, we are moving forward with another concrete initiative under the European Pillar of Social Rights. In the new world of work all workers need to have access to social protection, whether they are employed with standard contracts, new types of contracts or self-employed. I want to make sure that everybody who works is covered by social protection schemes, on the basis of their contributions. This is important to make sure our social protection systems are adequate, sustainable and in respect of intergenerational fairness."

In 2016, just below 40% of employed people in the EU were in non-standard employment or self-employed, half of whom are at risk of not having sufficient access to social protection and related employment services, according to estimates. In today's changing labour market, new forms of work are emerging and people change more frequently between jobs and employment statuses. The share of non-standard employment and self-employment is increasing in the labour market, especially among young people.

In line with the relevant principles of the European Pillar of Social Rights, the Commission aims to support access to social protection on the basis of contributions to all people. Due to their employment status, persons such as those in non-standard employment and self-employment have insufficient access and are, as a consequence, exposed to higher economic uncertainty and lower protection against social risks. Addressing this challenge harnesses the aim behind the Pillar to make our social models future-proof and to address intergenerational fairness, making the most of the future world of work.

To achieve this goal, and in line with the Treaty on the Functioning of the European Union and the Commission's commitment to social dialogue, the Commission is asking the opinion of the social partners by launching the second stage of the social partner consultation. The social partners now have 7 weeks to let the Commission know if they are willing to negotiate. In parallel, a wider public consultation is also open to collect the views of all relevant stakeholders such as public authorities, companies, the self-employed, platform workers and the civil society.

Drawing on the conclusions of these consultations, the Commission intends to present a proposal in the first half of next year.

Background

The Commission presented the European Pillar of Social Rights as a Commission Recommendation, which became effective as of 26 April 2017, and as a proposal for a joint proclamation by the Parliament, the Council and the Commission. The text of the proclamation was signed by all parties at the Social Summit for Fair Jobs and Growth on 17 November 2017 in Gothenburg, Sweden, following discussions between the European Parliament, the European Commission and the Member States.

The implementation of the European Pillar of Social Rights is a shared responsibility at all levels. Since the start of its mandate, the Commission has presented several legislative proposals to implement the Pillar at EU level, including recently a proposal to improve the work-life balance of working parents and carers. The Commission also launched two social partner consultations – one to modernise the rules on labour contracts, and another one on access to social protection for all. From 26 April to 23 June 2017, social partners had the occasion to express their views on both topics. A second stage on modernising the rules on labour contracts was open from 21 September 2017 until 3 November 2017.

Today, the second stage of the consultation on access to social protection has started. It builds upon the outcome of the first phase of the discussions. In parallel, the Commission is launching a public consultation and will organise hearings with key stakeholders, such as representatives of the self-employed, civil society and social protection providers.

The Juncker Commission has made a priority of building a fairer and more social Europe, as reflected in its Political Guidelines of July 2014. In September 2015, on the occasion of President Juncker's first State of the Union, the President said: “We have to step up the work for a fair and truly pan-European labour market. [...] As part of these efforts, I will want to develop a European Pillar of Social Rights, which takes account of the changing realities of Europe's societies and the world of work.”

In his most recent State of the Union address, on 13 September 2017, the President confirmed the Commission's commitment to move forward with the Pillar as an essential means to create a deeper, fairer and more social internal market: "If we want to avoid social fragmentation and social dumping in Europe, then Member States should agree on the European Pillar of Social Rights as soon as possible and at the latest at the Gothenburg summit in November. National social systems will still remain diverse and separate for a long time. But at the very least, we should work for a European Social Standards Union in which we have a common understanding of what is socially fair. Europe cannot work if it shuns workers."

(Source: The European Commission)

In and amongst tomorrow’s autumn budget announcement from UK Chancellor Philip Hammond, questions have been raised regarding housing, property and first-time buyers.

The Help to Buy scheme is set to end in 2020, that’s just over two years away. So what does the future of the UK property conundrum look like?

This week’s Your Thoughts focuses on relaying the opinions of professionals and experts across the sector on the autumn budget’s outcomes on property legislation, build to rent, stamp duty and investment into the nation’s future.

Dominic Martin, Operations Director, Atlas Residential:

With the UK’s housing sector still racing to try and keep up in the face of supply outstripping demand, and many would-be first-time buyers renting for longer and longer, it will be interesting to see how the Government plans to tackle the current issues in the Autumn Budget.

It’s recognised across the board that our housing market has changed dramatically over the past two decades, with young people now increasingly unable to get a foot on the ladder. One positive outcome has been the emergence of the professionally managed build to rent sector, which is offering some outstanding accommodation options to renters of all ages and backgrounds, which is changing the way that we think about the relationship between where we live, where we work and where we relax.

The Government could certainly do more to promote the growth of the build to rent (BTR) sector and give families more choice over their accommodation options. For example, BTR is referenced in the National Planning Policy Framework, but omitted from the National Planning Policy Guidance. Therefore, Local Authority planning officers aren’t taking the sector into account in the way that they could and should be. We can but hope that the Autumn Budget recognises this situation and prompts the government to push forward the inclusion of BTR in the National Planning Policy Guidance.

Of course, radical reform is always risky and with the current uncertainty around the impact that Brexit will have on the housing market, the government does need to tread carefully. Despite that, there are a number of factors that could be improved upon. There is a desperate need to regulate and professionalise the estate agency process, from leasing to management. The government’s ‘call for evidence’ closes at the end of November and it would be a shame to see this push for professionalisation become mired in red tape thereafter. The IRPM have helpfully launched their BTR qualification, but the faster the formal consultation process can be carried out, the sooner the results can start benefitting the UK’s renters and ensuring that the BTR sector flourishes and professionalises in the way that it has the potential to.

It would also be great to see the Autumn Budget tackle the issue of development finance in order to help future proof the construction of sufficient levels of housing (both for purchase and to rent) in the UK. A government construction debt guarantee scheme would be one innovative way to stimulate growth in the sector, as happens in the US and helps underpin new ‘multi-family’ (BTR) development. Unfortunately, many lenders are still cautious when financing this asset class and to often lump ‘Build to Rent’ in with traditional ‘Build to Sale’, when they should be offering a product that recognises the different risk profile. Government support could make a significant difference.

Of course, while we’re wishing for things from the Autumn Budget, an early Christmas present would be the reduction or removal of VAT on operational cost items, including management fees, which would help improve the marginality of the BTR sector. This would further help the sector to compete for land against the major housebuilders in urban locations and ultimately deliver more homes. Forgiving the increase in Stamp Duty Land Tax (SDLT) on BTR property investments would also help the sector to compete on a more level playing field. BTR landlords are ultimately providing significantly better customer service to their residents and invest more in staff, training and so forth. It would be fantastic to see this recognised through some form of SDLT relief. But then Santa isn’t real is he….

If the government is serious about recognizing the changing shape of the housing market – in which private renters now make up the second largest tenure, one that is growing all the time – then it needs to ensure that BTR is able to live up to its full potential and contribute to a future where the housing needs of all UK residents are met, not just a few.

Lucy Brennan, Partner, Saffery Champness:

The property conundrum continues to be a real headache across the board. First time buyers are struggling to get on the housing ladder, existing homeowners are struggling to move or downsize, and all the while the public purse is missing out on stamp duty income.

At the top of the market, stamp duty levels for the most valuable properties continues to contribute to stagnation. A cut for pensioners looking to downsize is reportedly on the cards and may kick-start movement. At the other end of the spectrum, there is growing chatter around the idea of a stamp duty cut for first time buyers who are struggling with the burden of finding deposits and financing mortgages – particularly in London and the South East. With Help to Buy set to end in 2020, we can certainly expect the Chancellor to try and address the nervousness among younger people and indeed housebuilders who are having to hedge their bets against uncertain future demand.

Similarly, pensions seem to be in the Budget cross-hairs yet again. While slashing pensions relief has been mooted as a potential route to financing a cut to NIC for younger earners it is difficult to see whether the government actually has the ability, and political will, to roll out significant reform. One of the few options on the table is a potential cut to the fairly generous carry-forward system, but the potential returns for the exchequer are limited and the risk of alienating the Conservative’s core demographic may outweigh any perceived fiscal upside.

Stacy Eden, Head of Property & Construction, Crowe Clark Whitehill:

For the UK to keep up with changing economic conditions, the Chancellor should consider more frequent business rates revaluations and a broader look at real estate tax as part of tomorrow’s announcement.

Stamp Duty Land Tax (SDLT) has consistently been perceived by the industry as the biggest tax barrier to business growth, and reductions at the top-end would be widely welcomed. This would free-up liquidity in the market, which will ultimately increase housing transactions and sales. We may even find that it raises more money.

Additionally, I am looking out for the Chancellor’s approach to simplifying the planning process. He could reinvigorate UK house-building by freeing up more areas of green belt land. Investing in planning departments to try and get closer to house-building targets is of great importance. We are currently well short of targets and this is contributing to higher house prices in certain area.”

Rob Marchant, VAT Partner, Crowe Clark Whitehill:

While it may be an ambitious ask, I would like to see VAT law changes that encourage the residential build-to-rent market. If rental income is treated as zero-rated rather than VAT exempt, it would allow landlords to reclaim VAT on running, management and repair costs.

Consequently, a potential barrier to housing stock maintenance would be removed. Such a change would particularly benefit Housing Associations, which incur costs on cladding and other building repairs to their social housing, where the VAT is often irrecoverable.

Paul Fay, Property Tax Partner, Crowe Clark Whitehill:

A stable and competitive tax system is vital. There have been too many changes in recent years and these have negatively affected the market. We need a period of tax stability.”

An exclusion of the 3% second home surcharge from affordable private rental housing would encourage the provision of affordable housing for lower paid workers.

Simon Heawood, CEO and Founder, Bricklane.com:

It is welcome news that the Chancellor is considering helping first time buyers who are almost priced out of home ownership, particularly in London where average first homes now cost £428,526. Lowering stamp duty for new entrants would be positive but, even if it were removed entirely, it would not address the deep underlying issues that mean the average first home deposit required in London is now above £100,000. We need structural improvements to increase supply of the right types of homes alongside alternative ways of investing in the property market so that those who cannot yet afford to buy do not miss out.

Jason Harris-Cohen, Property Specialist and Founder, Open Property Group:

There is a lot of speculation that the Chancellor is drawing up plans to reduce or temporarily suspend stamp duty for first-time buyers, in a bid to help young people get on the property ladder. This would be a breath of fresh air at a time when stamp duty is almost £11,500 for the average first-time buyer in London, and would also encourage older people to downsize and free up cash for their retirement. At the moment this tax is disrupting the flow of the UK housing market though it is unclear whether any stamp duty changes will apply country-wide, should they be introduced tomorrow.

In addition, there is also talk of the Chancellor reversing the stamp duty changes that were introduced in 2016 for buy-to-let and second homes, though this seems less likely. It's not unheard of for the Government to throw a curveball, however, and the Chancellor must be aware that this tax is currently deterring people from investing in the private rented sector. The longer it is around the more of a knock on effect it will have on the growing homelessness crisis, with the number of homeless in Britain already expected to double by 2041.

Mark Homer, Co-Founder, Progressive Property:

Still trying to rein back the support of younger voters from Jeremy Corbyn, the Government is under growing pressure to ease the path for first time buyers to buy their home.

Top of the list for the Chancellor is a cut in stamp duty specifically for this group, odds on favourite seems to be a reduction in the % payable on purchases whilst retaining the tiered non slab- sided system of the past.

Clearly also under pressure from the Treasury to retain stamp duty revenues which have risen sharply in recent years following a series of legislative reforms, a possible solution could

be a stamp duty holiday for buyers under a certain age or those that haven't owned before. This would protect longer term tax revenues and indeed extend this to other areas of the market to combat the general slowdown in residential sales.

Further extension of the Help to Buy scheme is likely to have the biggest positive effect on younger buyers. It is widely accepted that a reduction in the deposit size required to obtain a mortgage would offer the biggest boost to first time buyers, even more than a stamp duty cut. With promises of cash for a large- scale building programme in the budget, done properly a widening of the scope for Help to Buy could only provide positive support.

Stuart Law, CEO and Founder, Assetz Capital:

Despite Theresa May’s recent vow to fix the “broken housing market”, the steps taken so far have been lacklustre at best. Simply introducing an extra £2bn for affordable homes over five years is just not enough, so we need to see something more radical announced in the budget to address the housing crisis. There is growing pressure from the Conservative party members, led in many ways by Sajid Javid, to implement new policies that could radically improve housing supply, but whether these ideas get through Phillip Hammond into the Budget is anyone’s guess at present.

One potential route to increased housing supply could come via a fundamental revision of the Greenbelt. If local authorities issued compulsory purchase orders of farmland directly next to villages and towns with population pressure and proven housing demand, there could be a huge new supply of housing plots in places people want to live. The funding for this could come from the Treasury under the existing funding line from the Public Works Loan Board. Having just moved Housing Association funding off the Government’s balance sheet, there is £70bn that could be redeployed for this right away.

One solution could be that farmers and landowners could be paid double the agricultural field value; at around £15,000 per acre, which obviously compares poorly to the hundreds of thousands, or even millions, that land with planning permission is valued at. By avoiding gifting large planning gains to landowners, local authorities could be able to pass on materials savings to renters and homebuyers by either developing new council houses themselves, using new Treasury money perhaps, or passing on land to developers with price controls to limit rents and house prices.

The profits that the local authorities could see would need to be modest and regulated, and would need to fund additional local infrastructure. Crucially, this would have to be achieved without increasing council tax for existing residents, relying more so on the new council tax income created by the addition of more housing.

The government needs to think this through carefully but it may well be achievable. If landowners don’t have the opportunity to contest the compulsory purchase order with evidence of materially reduced farm viability, this is likely to cause significant backlash.

However, if introduced carefully, these measures could help in areas that suffer unreasonably high house prices in comparison to the average income for first and second-time buyers. In addition, stamp duty for first time buyers up to modest house price levels should be scrapped.

We are entering a new political era, and although this would be a compromise, it reflects a new populist middle ground that the Tories, and indeed Labour, should take ownership of, or else a new ‘Socialist-Capitalist’ party may rise from the recent populist awakening, to take both of their places.

Ian Hobday, CEO, WAY Investments:

Although this sounds like a move that will help many young people get on the property ladder, the expected axe on stamp duty for first-time buyers, is unfortunately not as simple as that. With house prices as they are in the south of the country it’s the deposit that is the main hurdle when it comes to buying a house.

In the South West for example, the average house price is £208,004 meaning the current stamp duty tax is £1,660. Your average first-time buyer will still need to find a 10% deposit which would be £20,800. This figure is simply unobtainable for most young people and impossible to save for with high rental prices in this area of the country. As a result, many first-time buyers are now turning to their families for support and a leg up onto the housing ladder, this approach not only has benefits for the first-time buyer but for many can also help mitigate future inheritance tax issues. While every little helps for first-time buyers, families gifting money during their lifetimes will see them on the housing ladder much more effectively than axing stamp duty.

Claire Fallows, Partner, Charles Russell Speechlys:

The government acknowledges that there is much to be done to boost housing supply. A critical question is whether Theresa May has the political appetite to open up the question of the green belt. Claims that the green belt remains sacrosanct are disingenuous, given that numerous authorities are releasing sites from green belt allocation through local plan reviews. In light of that, a wholesale strategic review of the purpose and function of the green belt must be in the interests of the country and is long overdue.

At the local level, questions remain over whether the neighbourhood planning system is fit for purpose. Removing local control is likely to be politically unpopular, but too many communities spend valuable time and scarce resources bringing forward plans with limits on development that become quickly out of date when compared to housing needs. The government’s reforms proposed through the White Paper need to be accelerated, including a more straightforward approach to the relationship between assessments of housing need and its supply through local and neighbourhood plans.

Indeed, a planning system based on out of date development plans fails everyone. We can expect increased intervention from government, to push poorly performing authorities into making difficult decisions and allocating sites for housing. The government should consider carefully whether it will continue to call in applications where authorities have decided to grant planning permission contrary to neighbourhood plans.

The community infrastructure levy, and its relationship with section 106 agreements, also require overhaul. Delays are caused on larger sites whilst developers grapple with an overly complex system. Clarity is required as to the government’s preferred way forward, and transitional provisions should be introduced urgently whilst detailed regulation is worked up.

Planning permission is only the first step along the way - developers will only build what they can sell. Given continuing concerns around affordability, the government is expected to remain committed to Help to Buy in the short term at least. The house building industry will also be keen to understand the government’s longer term proposals for the popular scheme.

Developers and landowners require certainty as quickly as possible as to the government’s proposals for change. Whatever the announcements may be on Wednesday, it is imperative that the government makes available sufficient resources to push forward its reforms.

Chris Davies, Managing Director, DRS Bond Management:

To maintain growth in the UK economy DRS would hope to see local authorities given permission to borrow to expand affordable housing stock, perhaps in consort with Housing Associations, whose debts have just been transferred off the government’s balance sheet.

With interest rates set to remain below 2% indefinitely, Sajid Javid’s idea of borrowing £50Bn would trigger a surge in house building of 100,000 additional units a year. This could result in the requirement for a substantial number of Road and Sewer bonds, as well as Performance bonds, which DRS typically arrange without the need for tangible security.

We would also like to see the government press ahead with the pipeline of infrastructure projects. The civil engineering supply chain has resourced itself in anticipation of billions of pounds of capital expenditure for infrastructure being forthcoming.

As Construction contributes £1 in every £10 spent by UK plc directly and up to £1 in every £6 indirectly, it is a key sector of the economy and essential if economic growth is to be maintained. The requirement for surety bonds would be substantial.

Our expectation given the current volatility within government is that both opportunities will be largely missed, which would be unfortunate at best.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

In a recent turn of events, Deliveroo came out victorious in a legal battle with its drivers, which are to be considered self-employed. On the other hand, just weeks ago, Uber won a case against its drivers, to now be considered employed workers and be entitled to worker benefits. Below Anthony Robinson, Consultant Solicitor at Excello Law, talks to Lawyer Monthly about the differences between the two cases, and why Deliveroo won this whereas Uber lost its appeal.

In the latest legal battle over workers’ rights and the gig economy, Deliveroo has emerged victorious. As one of the UK’s biggest gig economy companies, the food delivery app defeated a demand by north London couriers for union recognition, and by extension, workers’ rights. The ruling by the Central Arbitration Committee (CAC), the tribunal that oversees collective bargaining law, was a triumph for Deliveroo and a knock back for the Independent Workers Union of Great Britain (IWGB), which had backed the case.

The Deliveroo decision comes hard on the heels of the latest decision against Uber which lost its appeal against an Employment Appeal Tribunal (EAT) ruling: that its drivers should be classified as workers with rights, such as holiday pay and a minimum wage, rather than being self-employed. That case, brought by two drivers, was also supported by the IWGB.

So what makes Deliveroo different from Uber? The EAT decision in the Uber case was reached because the drivers were deemed to be workers for the purposes of the Employment Rights Act 1996, the Working Time Regulations 1999 and the National Minimum Wage Act 1998. Whereas the Deliveroo case did not involve an Employment Tribunal. Instead, the couriers asked that their union be recognised for the purposes of collective bargaining: the CAC had to consider the IWGB’s application for recognition for that purpose.

The worker issue was fundamental to the question of the right to recognition as collective bargaining rights only apply to workers. Critically, the CAC agreed with Deliveroo’s claim that its couriers are self-employed and backed the argument that their riders are able to accept or decline jobs, and most importantly they have the right to substitution - the ability to ask someone else to deliver food on their behalf.

In its decision, the CAC said: “The central and insuperable difficulty for the union is that we find the substitution right to be genuine, in the sense that Deliveroo have decided in the new contract that riders have a right to substitute themselves both before and after they have accepted a particular job.” It continued “In light of our central finding on substitution, it cannot be said that the riders undertake to do personally any work or services for another party.”

The net result is that the CAC confirmed that Deliveroo couriers are self-employed contractors since they have the right to allocate a substitute to do the work for them. The key difference from the Uber decision is that the Deliveroo couriers more closely match the definition of self-employment status because they have the right to decide when they log on to the App: they can choose to decline jobs they do not want and substitute with others for any particular job.

Uber will take comfort from the CAC decision in its continued legal challenge. We can therefore look forward to more battles ahead in this intriguing and important struggle to define the status of an ever-increasing number of people who choose to work in the gig economy.

DLA Piper won a significant appellate victory this week in its representation of SteadyMed Ltd., a specialty pharmaceutical company, before the United States Court of Appeals for the Federal Circuit. On November 14^th 2017, the Court affirmed the March 31^st 2017 ruling by the Patent Trial and Appeal Board of the United States Patent and Trademark Office, invalidating all patent claims in United Therapeutics' key patent covering its products Remodulin, Tyvaso, and Orenitram. The case was unusual in that the Board and Federal Circuit relied on some of the same prior art that had been submitted to the examiner during the patent's original prosecution, although the examiner had not commented on some of this prior art, and was unaware of the arguments raised by SteadyMed. The Federal Circuit affirmed without opinion the Board's finding that the claims in United Therapeutics' patent were both anticipated and obvious on multiple grounds.

The DLA Piper team representing SteadyMed was led by partner Stuart Pollack (New York), and included partners Stan Panikowski, Lisa Haile (both of San Diego), associate Stephanie Chichetti (New York), and paralegal Alice Lineberry (Austin).

(Source: DLA Piper)

Clifford Chance has advised Royal Dutch Shell plc (Shell) on the sale of 111.8 million shares in Australian Oil and Gas company Woodside. At approximately AU$3.5 billion, the sale represents 100% of Shell's interest in Woodside and 13.28% of the issued capital in Woodside. Rothschild was financial advisor to Shell and UBS and Morgan Stanley were appointed as sale banks.

Lead partner on the matter Lance Sacks offered, "This was the first billion-dollar auction completed in this market without a trading halt, making it a significant milestone for both our team, and the parties involved. We are delighted to continue our strong track record advising on complex transactions in the market."

Lance was supported by corporate counsel Amelia Horvath in Sydney, with partner Johannes Juette offering US securities law advice from Singapore.

Clifford Chance and Rothschild also advised on Shell's multi-billion dollar sale in Woodside in 2014.

(Source: Clifford Chance)

The House of Lords Constitution Committee has warned that the Sanctions and Anti-Money Laundering Bill, the first Brexit Bill to be scrutinised by the House of Lords, contains inappropriately broad powers for ministers.

The Sanctions and Anti-Money Laundering Bill is intended to provide a new, long-term legal basis for ministers to make secondary legislation concerning sanctions, money laundering and terrorist financing. The Bill is expected to begin committee stage in the House of Lords tomorrow, Tuesday 21^st November.

The Constitution Committee’s scrutiny of the Bill includes:

1. Ministerial powers – the Bill creates a broad Henry VIII power authorising ministers to make ‘sanctions regulations’ and allows new forms of sanctions to be created by secondary legislation. The Committee say that it is not appropriate for ministers to have such broad powers.
2. Scrutiny – the Committee say that it is essential that the Bill provides sufficient safeguards and parliamentary scrutiny procedures to make the new sanctions powers constitutionally acceptable.
3. Legal certainty – individuals subject to sanctions under the Bill have no right to know the reasons for the sanctions until their appeal against them reaches the courts. The Committee say that this prevents them from preparing their case, undermining common law principles and procedural fairness.
4. Criminal offences – the Bill allows ministers to create criminal offences punishable by up to 10 years’ imprisonment, while also setting the rules on evidence consideration and defence to those offences. The Committee say that they are deeply concerned by this power.

Chairman of the Committee Baroness Taylor of Bolton said: “The Sanctions and Anti-Money Laundering Bill grants unduly broad powers to ministers and establishes sanctions regimes that will be subject to less scrutiny and challenge than those that exist at present.

“The Bill is the first piece of Brexit legislation to be scrutinised by the House of Lords. The Government should not use the transfer of laws from the EU to the UK as an opportunity to increase its own power, reduce scrutiny, or weaken individuals’ rights.”

(Source: House of Lords)

Robert Mugabe's wife, or "Gucci Grace" to her critics, was tipped to be Zimbabwe's next president.

As Phillip Hammond gets ready for the Budget, experts at BDO expect few giveaways or surprises as the Chancellor builds a Brexit war chest to prepare for the uncertainty to come.

Paul Falvey, a tax partner at accountancy and business advisory firm BDO, says: “Hammond’s hands are not only tied by Brexit uncertainty, they are handcuffed and manacled by low growth forecasts and a wafer-thin majority in Parliament too.”

Top three Budget predictions

Despite having limited funds available, BDO is predicting a number of measures to be announced in the Budget including:

1. A bid to woo younger voters and a ‘tax on age’?

We expect a raft of measures aimed at helping younger voters and closing the inter-generational gap. At its most costly for the Treasury, this could include a possible cut in National Insurance rates for younger workers but is more likely to mean pension auto-enrolment extended to workers below the age of 22 and more concessions on student loans.

Paul Falvey said: “With Labour performing well with younger voters at the last election, the Chancellor will undoubtedly see the Budget as an opportunity to redress the balance. However, with no scope for overall tax cuts, the Chancellor will need to find the money from somewhere else; possibly from a reduction in tax relief for older savers. The Chancellor must be careful here - mishandle this and he could be accused of creating a “tax on age”.

2. Levelling the playing field for off-payroll workers

In the last Budget, the Chancellor introduced new rules that dictate how much tax is paid by ‘off-payroll workers’, or contractors, working in the public sector. The old rules required the contractor to operate PAYE but they frequently didn’t do this. New rules were introduced in April to put the onus the local authority ‘employer’ to operate PAYE.

We now expect the rules to be extended to cover private sector organisations as an anti-avoidance measure.

Paul Falvey said: “Since the new off-payroll rules only affected the public sector there have been warnings of an IT contractor exodus from Whitehall, with contractors preferring to work in the private sector for tax purposes. We expect the Chancellor to even up the playing field and extend the rules to private sector companies too to increase tax take, correct an imbalance in employment tax legislation and avoid a brain-drain from the public sector.”

3. Help for the high street

We expect to see some help offered to the UK’s beleaguered high street. The switching of the measure from RPI (at 3.9%) to the lower CPI (2.9%) announced in Spring 2017 could be brought forward to 2018. There could also be measures to create more certainty and fairness by legislating for more frequent valuations every three years.

Commenting Paul Falvey said: “Britain’s high street has been struggling for some time, with stagnant wage growth limiting spending power while online retailers have attracted what disposable income there is. We expect the Chancellor to give the high street some greater certainty and fairness by making adjustments to business rates.

“In the longer term, I wouldn’t be surprised to see the Government introduce some form of low tax on the ‘digital real estate’ of large online retailers.”

The Budget wish list

The Government must take a long-term view of the UK economy and put plans in place now to build a sustainable and balanced post-Brexit trading environment. It is crucial we don’t lose sight of the domestic business agenda during EU negotiations. To build this ‘new economy’ we would like to see the Chancellor focus on a simpler and consistent tax system, tackle the shortage of patient capital for innovative scale-ups and bolster resources for HMRC.

1. A tax simplification road map

The complexity of the UK’s tax code is one of the major obstacles of growth. Hammond has already made several u-turns and confusing changes in policy direction on simplification measures – most recently when he delayed the abolition of Class 2 NIC for another year. He has talked about moving to a new consultation cycle on tax legislation, which is welcomed but it won’t speed up simplification if the Chancellor keeps delaying decisions on the changes needed.

We want to see the Chancellor announce a tax simplification road map – similar to the business tax road map introduced in 2016 – which starts after Brexit negotiations have finalised and spans the next decade to give businesses some clarity for the future.

Paul Falvey said: “There needs to be a coherent tax strategy that deals with the challenges of inter-generational fairness; one that supports growth and protects the tax base in a globally mobile and digitised economy.

“The big challenge is to do that without creating unnecessary bureaucracy or stifling UK competitiveness. The Chancellor’s focus should be on a pro-business Budget that reduces administrative burdens and improves fairness and transparency.”

We would also like to see the Government take bold steps and agree a moratorium on all new business tax policies that do not simplify the system until 2020 or until the Brexit negotiations are finished (which ever comes first).

Paul Falvey said: “In the last 30 years, the UK tax code has increased more than tenfold. A commitment to simplicity would be a clear signal to the world that the UK is a destination where businesses can flourish.

“The sheer volume and complexity of our tax code is a major obstacle for growth. Providing businesses with a clear road map for how and when simplification will take place over the coming decade will provide some certainty for the future.”

2. Tackling the shortage of patient capital

The Government has promised to announce a series of measures in the upcoming Budget to tackle the shortage of long-term investment, known as ‘patient capital’, in the UK’s most innovative companies. But despite this, there have been rumours that Enterprise Investment Scheme (EIS) relief could be significantly reduced and even withdrawn for lower risk or asset backed investments.

EIS has been hugely successful with more than £14bn invested in over 24,500 companies since its launch. We would like to see the EIS maintained or, if that is not possible, at least for any tightening of the rules kept to a minimum. One option would be to maintain the 30% relief for businesses advancing tech IP and reducing it to 20% for other businesses. Another option could be to increase the required holding period for EIS from three to five years to align with the patient capital policy objective.

Paul Falvey said: “The UK is a hotbed of innovation and technology yet many scale-ups find it difficult to get the funding to break through to become bigger businesses. UK policy makers are often asking where the UK Google or the UK Facebook is. The answer must be to have a system of incentivised investment in our UK talent.”

3. More resources for HMRC

Last month, Brexit Secretary, David Davis revealed that HMRC will need an extra 5,000 staff to work on new custom arrangements after Brexit – a number which BDO calculates will increase the HMRC wage bill by 8%, which is an additional £200m a year. As well as Brexit, HMRC will require continued investment to help combat tax evasion.

Paul Falvey said: “HMRC resources will be stretched paper thin in the years ahead. In order to ensure that post-Brexit trade is as seamless as possible, HMRC must be given the resources to support British businesses.”

(Source: BDO)

Advisers expect referrals from accountants and lawyers will become a bigger source of new business over the next 12 months, exclusive adviser research from Prudential¹ shows.

According to around two out of five advisers (37%) referrals from existing clients are by far the biggest source of attracting new clients – but referrals from lawyers and accountants are firmly established as the second-best source.

More than half (52%) of advisers believe the number of referrals they receive from other professionals will rise in the year ahead boosting new business levels. The study found 15% of advisers say accountant and lawyer referrals are their biggest source of new business – slightly up from 11% in a similar study² last year.

Part of the reason for this expected growth in referrals may be an increasing willingness by advisers to outsource specialised and complex advice. Nearly half of advisers (47%) say they outsource to specialists while another 25% indicated a willingness to outsource in the future. Just 23% say they will never outsource to another profession.

Another reason may be the growing need for advice on protection from inheritance tax bills with around 58% of advisers saying that they’ve seen a rise in inheritance tax advice enquiries in the past year. Looking to the future, IHT planning was identified by 37% of advisers as the second most significant source of opportunities to provide advice over the next three years, just behind the 40% who said advice on taxation of retirement income.

Other sources for attracting new clients to advisers include their or their network’s website, with 11% of advisers saying this is their best source of new clients, while nearly one in 10 (nine%) say their direct marketing including social media generates the most leads. Events are still important – around eight% say they identify new advice opportunities from them – while the same number say approved adviser lists are their best new business source.

Biggest drivers for creating advice opportunities to adviser firms:

Due to rounding, numbers may not add up to 100%

John Gaskell, Head of Personal Financial Planning, at the Institute of Chartered Accountants in England and Wales (ICAEW) said: “It’s encouraging to see that advisers expect professional connections to become a greater source of new clients. In an increasingly complex financial planning environment, there is undoubtedly a greater opportunity for accountants and advisers to work more closely together to deliver better outcomes for their clients. ICAEW is launching its online Personal Financial Planning Community later this month which will be open to both ICAEW members and other professionals with an interest in this increasingly complex and important part of the professional advice sector. The Community will provide a range of content in the areas of regulation, tax, pensions, investments and probate to help professionals from different disciplines keep up-to-date and find ways to work more collaboratively.”

Paul Harrison, head of Prudential’s Business Consultancy for advisers, said: “The quality of service and the added value that advisers provide continues to be one of their best sources for attracting new clients through personal recommendations.

“However, working with other professionals, particularly accountants and lawyers, is growing in importance when it comes to new client referrals and is likely to continue to expand in the future.

“Outsourcing to specialists and working in partnership with other professionals with expertise in complex areas is becoming a significant part of the advice market but does require clarity as to the roles and responsibilities of all involved.”

(Source: Knowledge TV)

With various hurricanes taking the Atlantic coasts by storm in recent months, there are consequently more legal disputes to be expected according to Hermes Marangos and Tom Rotherham, respectively Partner and Associate at Signature Litigation.

The 2017 Atlantic Hurricane season has witnessed a cluster of exceptionally monstrous category 4 and 5 hurricanes. Litigation experts around the world are consequently bracing themselves for the unprecedented complexity of dealing with the consecutive losses of hurricanes Harvey, Irma, Jose, and Maria.

In respect of property damage issues, one of the main considerations will be if there has been an "event" which triggers cover. For example, property damage caused by flooding is often excluded under the terms of property damage cover. Property holders with flood exclusions in the United States may well be covered by the National Flood Insurance Programme, operated through FEMA, although it is thought that only 15-25% of properties at risk have such protection.

Of particular concern to losses sustained in the south west Caribbean will be how those losses are allocated between multiple "events", i.e. between the damage caused by Irma, Jose and Maria. Of course, issues of allocating sustained periods of hurricane-like weather into different "events" can impact greatly on policy limits and deductibles, leading to contentious proceedings where there are divergent interests in multi-layer programmes.

The largest claims are likely to result from Business Interruption (BI) policies. BI losses are almost certain to be exacerbated by the prevalence of the oil industry in Irma affected areas and the subsequent impact on global energy markets. Unfortunately, given the complexity involved in calculating losses sustained by businesses after a major hurricane, BI claims can also be some of the most contentious.

Insureds must establish both that property damage was sustained by an insured peril and that interruption to the Insured's business resulted from that property damage. Demonstrating both "triggers" to policy coverage can be difficult in the aftermath of a hurricane, where there is also usually damage to transport and utility infrastructure which also causes interruption to businesses. Similarly, losses sustained from criminal activity such as looting in the aftermath of hurricanes are unlikely to be covered, as losses are not said to be caused by the sustained property damage.

In addition to ensuring that cedants are properly applying themselves to the types of considerations outlined above (and therefore in compliance with any claims control clause contained in the reinsurance contract), reinsurers and retrocessionaires will need to consider a number of contentious issues.

In respect of aggregating losses in such programmes, contracts typically contain an "hours" clause which define a loss occurrence as meaning all losses arising out of one catastrophe. The duration of any such loss occurrence for a named peril is typically 72 hours. Exact contractual wordings vary, but generally they provide that hurricane losses within the specified number of hours can be aggregated. Generally, the reinsured is able to select the time of commencement – usually, at the time of their first reported loss. Depending on the path and speed of a hurricane, and subject to any reinstatement of cover, it may be possible for a reinsured to recover in respect of multiple losses within the same hurricane, although periods cannot overlap. It is crucial that reinsurers carefully review wordings, definitions and factual circumstances so that issues relating to cedant's aggregations can be avoided.

Reinsurers face the challenge of multiple jurisdictions that have sustained losses resulting from Irma, José and Maria in particular. Cover is not always provided on a "back to back" basis, meaning that important terms may be defined differently in the reinsurance contract and the underlying contract of insurance. Problems arise when each contract applies defined aggregation terms, such as "storm", in a different way. On a more fundamental level, each contract may have different governing law and jurisdiction clauses, leading to situations where different approaches to policy coverage are likely to occur in the separate jurisdictions that govern the reinsurance and underlying insurance.

The hurricanes are also having an extensive impact on reinsurance capital. Although it is unlikely Irma, Harvey, or Maria will surpass the total insured losses of the 2005 Hurricane Katrina (estimated at $62.2billion), the losses are still very substantial. Hiscox estimates net Harvey losses of $150million out of an industry total of $25billion and the FEMA expects more than 450,000 Harvey victims to file for assistance. Furthermore, Florida policymakers have already so far filed almost $2billion in insurance claims for Hurricane Irma, with total loss occurrence estimated at $32-50billion. Florida has, unsurprisingly, struggled with this massive volume of claims due to a lack of insurance adjusters. The disasters are also reportedly providing a test of alternative capital that has redefined the reinsurance sector in recent years.

Despite the impact of these immense figures, experts have recently reined in loss estimates. AIR Worldwide, for example, has dramatically narrowed its loss estimate for Hurricane Irma and consequently, US P&C and reinsurance stocks have received a fillip, in turn pushing up European reinsurance shares. This may very well be the light at the end of the tunnel of the 2017 Atlantic Hurricane Season. However, the subsequent litigation costs for coverage disputes should not be underestimated.