Focus Insolvency Group have profiled the new Business Secretary, Greg Clark, to find out what he may have in store for businesses.
Theresa May was appointed as the new Prime Minister of the UK on 13 July 2016. She immediately began a dramatic cabinet reshuffle, before appointing the relatively unknown Greg Clark as the Business Secretary, officially titled the Secretary of State for Business, Energy and Industrial Strategy. Clark has previously been described by the Financial Times as an “economically liberal Conservative with a social conscience”.
Until 14 July 2016, Clark held the post of Secretary of State for the Department for Communities and Local Government. His other previously held posts include Minister for Universities, Science and Cities, Financial Secretary to the Treasury and Shadow Secretary of State for Energy and Climate Change.
The department that the Business Secretary is in charge of has gone through eight iterations since 1963. Until 14 July 2016, Sajid Javid was the Secretary of State for Business, Innovation and Skills. The newly formed Department for Business, Energy and Industrial Strategy (DBIES) means that the Department for Energy and Climate Change (DECC) will cease to exist as a separate department.
According to an investor communication issued on 15 July by the DECC, the new DBIES will be responsible for:
- Developing and delivering a comprehensive industrial strategy, and leading the Government’s relationship with business;
- Furthering the UK’s status at the leading edge of science, research and innovation;
- Ensuring that the country has secure energy supplies that are reliable, affordable and clean; and
- Dealing with climate change.
In a statement regarding his appointment, Clark stated: “I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government’s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.”
Whilst Clark has only been in the role for a very short period, it is difficult to confidently predict his future plans for businesses. However, by looking at his previous voting records, we can make some predictions. TheyWorkForYou is a project run by the independent charity mySociety, whose aim is to make it easier for anyone to understand what is happening in Parliament. According to their statistics, on the vast majority of issues, Clark has voted the same way as other Conservative MPs.
More illuminatingly perhaps, Clark has voted consistently for reducing the rate of corporation tax. Corporation tax has already been cut from 28% to 20% back in 2010. In March 2016, then Chancellor of the Exchequer George Osborne stated in his Budget that he would cut corporation tax back further to 17% by April 2020. New Chancellor Phillip Hammond has ruled out an emergency budget, meaning that the next budget is unlikely to take place until Spring 2017. Given that Hammond also has generally voted for reducing corporation tax, it would seem likely that the planned reduction in corporation tax may well continue to take place.
Having previously campaigned for the UK to remain in the EU, Clark has a large challenge ahead of him to calm the choppy waters Brexit has left businesses in. In Clark’s second official statement in his new role, Clark stated on the proposed takeover of ARM Holdings by SoftBank, “This potential investment is a huge vote of confidence in the British economy and our continued future as a world-leading destination for global investment. The investor wants to grow the number of jobs in the UK and keep its headquarters in Cambridge, the government wants to see the companies work together to make sure these commitments are binding.”
Our Group Development Director, Andy Platt, comments on Clark’s appointment:
“Given the recent referendum result and the dramatic changes to the cabinet in the last few weeks, it is likely to be an uncertain time for many UK businesses. We can expect changes to taxation and trade regulations which will affect businesses of all sizes. We would strongly recommend that all businesses take professional advice where needed and our message is that we are ‘Here to Help’. We are happy to assist businesses with preparing their cash-flow forecasts, updating their business plans or performing thorough reviews of any company experiencing financial difficulties. Please do not hesitate to contact me on 0161 214 7913 if we can be of any assistance.”