The UK is set to resume negotiations with India over a free trade agreement in the new year, following a break in discussions due to the recent elections in both nations, as confirmed by Prime Minister Keir Starmer’s office on Monday.
Prime Minister Starmer aims to foster a “new strategic partnership” with India, with a focus on strengthening cooperation in key areas such as security, education, technology and climate change. This comes after Starmer’s meeting with Indian Prime Minister Narendra Modi at the G20 summit in Brazil, where both leaders discussed the path forward for UK-India relations.
“A new trade agreement with India will generate significant economic benefits, supporting jobs and prosperity across the UK,” said Starmer, whose Labour Party assumed office in July.
In addition to his discussions with Prime Minister Modi, Starmer also engaged with Chinese President Xi Jinping, urging the establishment of more “consistent and durable” ties between the two countries, particularly in areas such as trade, the economy, and climate change.
With a commitment to securing the fastest sustained economic growth within the G7, Starmer is positioning the UK to leverage trade agreements with key global partners. The Organisation for Economic Co-operation and Development (OECD) has predicted that UK growth in 2025 will be the lowest among G7 nations, emphasising the importance of these international negotiations.
The previous Conservative administration had engaged in extensive trade talks with India, but these discussions stalled in March due to the Indian elections. A British official stated that finalising an agreement ahead of the Indian elections was not feasible.
Bilateral trade between the UK and India, the world’s fifth- and sixth-largest economies, was valued at £42 billion ($53.2 billion) in the 12 months leading up to June, with UK exports to India accounting for £16.6 billion.
Ahead of India’s general election earlier this year, which secured Modi a third consecutive term, there were indications that India would prioritise completing trade deals with the UK and Oman.
However, previous challenges in the negotiations have centred on issues such as India’s high import duties on British whiskey and its demand for greater visa access for Indian students and businesses.
“India remains a crucial trading partner for the UK. We are optimistic that a mutually beneficial trade agreement can be reached, benefiting both nations,” commented British Business Minister Jonathan Reynolds.
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Read MoreHow Will The New Employment (Allocation of Tips) Act 2023 Affect The Hospitality and Leisure Industries?
The landscape of tipping and service charges in the UK is set to undergo a significant transformation with the introduction of the Employment (Allocation of Tips) Act 2023 later this year.
This legislation aims to eliminate uncertainties surrounding the allocation of service charges and other tips, ensuring that employees receive their due share.
In this article, we delve into the current system and the forthcoming changes that businesses in the leisure and hospitality sectors should be aware of.
At present, “tipping” typically encompasses both tips (whether in cash or card) and service charges, which can be discretionary or mandatory. When customers give cash tips directly to staff, these tips essentially become the property of the employee. While their employment contract may stipulate otherwise, it is generally up to the individual to decide whether to share these tips with colleagues.
On the other hand, when tips and service charges are collected by the employer—whether through a tip jar on the counter or a 12.5% service charge added to the bill—the distribution methods can vary. These range from the employer determining the allocation of tips and service charges to the staff members themselves agreeing on the day’s distribution of cash tips.
Additionally, many businesses put in place a “tronc” system, being a mechanism which allows tips and service charges to be pooled and distributed among staff by a designated “Troncmaster” without direction from the employer. It is worth noting that the chosen method of collection and distribution carries tax and national insurance implications, which will not be covered in this article.
Currently, there are no restrictions on businesses deducting amounts from the collected tips and service charges before distributing them to staff. While there may be valid reasons for such deductions—such as the operational costs of administering a tronc scheme—media attention has increasingly focused on employers making significant deductions from service charges, particularly as around 80% of UK tipping now occurs via card payments.
Five key changes Under the Employment (Allocation of Tips) Act 2023 are as follows:
Under the new legislation, businesses will no longer be permitted to make deductions from the tips and service charges collected. Every penny collected must be distributed to the staff, with deductions only permissible for tax or as otherwise authorised by law.
Businesses will be obligated to allocate tips and service charges “fairly” among workers. Although the legislation does not specify what constitutes fair allocation, this is expected to be clarified in due course. Employers will be required to have a written policy outlining the fair, transparent, and consistent distribution of tips.
Tips and service charges must be paid to eligible workers no later than the end of the month following the month in which the tip or service charge was received from th
Employers must maintain records of the allocation and distribution of tips for a minimum of three years from the date they are received.
Employees will have a separate right to bring a claim in an employment tribunal if there is a breach of these requirements. The tribunal may, among other remedies, order compensation of up to £5,000 to an affected employee to compensate for any losses suffered.
The implications of these changes are significant, particularly for employers in the leisure and hospitality sectors. With businesses already facing financial challenges, the additional administrative burden of distributing tips and service charges could strain resources. One alternative may be to pass these costs back onto customers, but this is unlikely to be popular in the current economic climate.
In light of the forthcoming legislation, it is prudent for businesses to start implementing the necessary policies, structures, and procedures now. By doing so, businesses can be better prepared to comply with the new requirements and ensure compliance from the outset.
To discuss any of the points raised in this article, please contact Adam Convisser or fill in the form below.
Read MoreOn 18 September 2023, the UK Competition and Markets Authority (CMA) issued important guidance to the fashion industry regarding “greenwashing.”
This follows concerns that companies may be making misleading environmental claims, which can deceive consumers and harm competitors that adhere to stricter sustainability standards.
Greenwashing refers to unsubstantiated or exaggerated claims about a product’s environmental benefits. The CMA’s new guidance outlines how businesses in the fashion sector should ensure that their eco-friendly claims are accurate, transparent, and comply with consumer protection laws.
The CMA’s guidance signals an increased focus on consumer rights in relation to environmental claims. Businesses found in breach of these principles may face enforcement actions, including fines or legal action under the UK’s consumer protection laws.
Fashion brands should review their current marketing practices and ensure that all environmental claims are truthful, specific, and supported by evidence. It is vital to communicate any green credentials clearly and to avoid misleading consumers, as regulators and consumers alike are placing greater scrutiny on sustainability efforts.
To discuss any of the points raised in this article, please contact Ann-Maree Blake or fill in the form below.
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