Tag: PWC

The press release issued by PWC on 10 December 2022.

• Number of green jobs advertised in UK almost trebles, finds PwC’s Green Jobs Barometer
• Regional disparity becomes more pronounced with one in five of all green jobs in London
• Most jobs professional or scientific – significant gap in trade skills and jobs essential for net zero transition

Green jobs are growing around four times the rate of the overall UK employment market, with 2.2% of all new jobs classed as green. However more than one-third of these roles are now based in London and the South East, with a dominance of professional and scientific roles.

The second edition of PwC’s Green Jobs Barometer has found that the number of green jobs advertised in the UK has almost trebled in the last year, equating to 336,000 positions, providing encouragement that the economy is becoming greener.

The Green Jobs Barometer, which first launched in November 2021, tracks movements in green job creation, job loss, carbon intensity of employment, and worker sentiment across regions and sectors.

In the year to June 2022, every region of the UK saw green jobs accounting for a greater share of the job market, and the number of green jobs at least double in absolute terms.

Carl Sizer, PwC UK’s Head of Regions, commented:

“The huge growth in green jobs over the last year illustrates how we are creating a Green Britain. One year on, our Green Jobs Barometer has shone a light on the regions and sectors where these jobs are being created.

“While Wales and Scotland are among the top performers, it’s striking that one in five new green roles are based in the Capital. If growth continues on this trajectory, the compounding effect means the green economy will increase London’s dominance over other cities and regions. If we want to meet our Net Zero ambitions while driving growth, then the green economy needs to be nationwide.

“This year’s Barometer shows that many green jobs are in professional and scientific roles, while there is an ever-growing gap in new green trades jobs which are equally vital to net zero plans.

“We must therefore be conscious that this is not just a story of job creation, but also one that highlights the critical requirement for upskilling and training to prepare the UK workforce for the jobs that will realise the country’s ambitions. This will need significant investment – for example, our data shows that between 10,000 and 66,000 new tradespeople will be needed each year to retrofit the 29 million homes with low EPC ratings.”

 

Scotland leads green surge

Scotland has the highest proportion of green jobs, at 3.3% (up from 1.7% last year). London saw the second strongest increase in green jobs as a proportion of its job market, and by volume of jobs London and the South East are pulling away from the rest of the country.  For example,  just 7,594 unique green job ads were for roles in the North East in 2022, compared to the significant 110,067 located across London and the South East.

While population density is a factor, the South’s dominance is reinforced when you consider more than one-third of all the green jobs being created today are professional and scientific roles, with an ever-growing gap in new green trades jobs which are equally vital to the net zero transition.

The demand for green jobs in Scotland is being driven by the energy sector – a thriving energy hub, the region boasts the largest pool of energy-related skills in the UK, skills which are highly transferable to roles in the emerging renewables subsector.

Wales’ move up the table is down to a 30% increase in the overall number of jobs advertised, plus a 150% increase in green jobs, behind only London and Scotland. There was a strong demand for green roles in manufacturing, construction and professional services.

Conversely, Yorkshire and the Humber and Northern Ireland both fell six places with each having a green jobs proportion of 1.9% – though both have improved from 1.2% last year.

Lynne Baber, Sustainability Leader, PwC UK, said: 

“Our economy, and our ambitions for net zero, rely on a greener workforce that can adapt to the changing demands of a changing planet – from the transition away from fossil fuels to the technology that will accelerate the pace at which we move towards net zero.

“Small businesses face the biggest barriers to transitioning to net zero. And, given SMEs make up the backbone of the UK’s economy, the simple truth is that we will not be able to seize the full opportunity of green jobs if more help is not offered to SMEs, especially in the regions outside Scotland, London and the South East.

“Businesses are now recognising the importance of putting their responsibilities to shareholders on the same level as other stakeholders, from employees to customers – and this mentality will help create yet more green jobs.”

The press release issued by PWC on 12 December 2022.

• Fresh analysis shows that a flood as extensive as 2015’s Storm Desmond, Eva or Frank would result in insurance losses of up to £1.6 billion in today’s terms according to PwC
• Despite protection from schemes such as Flood Re, restrictions, which apply to commercial properties, homes built from 1 January 2009, and blocks of more than three residential flats would mean that these groups may still be at risk of adverse weather conditions.

Costs from extreme weather events would top £1 billion, in today’s terms, according to fresh analysis by PwC UK. The research comes as the British Red Cross warns that one in seven UK households do not hold building or content insurance.  Over the last decade the most costly floods in terms of insurance costs occurred during the winter of 2015-16 which saw Storms Desmond, Eva and Frank impact homes and businesses across the UK.

The figures come following the significant impact of Storm Eunice from February of this year which saw estimated losses of £200 million to £350 million based on the high winds which led to damage to homes and commercial buildings plus extensive travel disruptions.

Despite expectations that Storm Eunice would be severe, the strongest gusts severely impacted coastal areas as well as caused travel disruption with airlines and train operators cancelling services. The damage from Storm Eunice was mainly in respect of damage to homes, commercial properties and vehicles from falling trees and flying debris.

Mohammad Khan, General Insurance Leader at PwC UK, said:

“We’ve been somewhat fortunate that the warmer autumn has held back some of the more impactful weather events, however as we approach the end of the year it’s likely that we will see an uptick in extreme weather.

“Our analysis shows that losses from previous storms and floods in today’s terms would have caused significant repercussions resulting in costs hitting over one billion pounds.

“Thankfully, households in most at-risk flood zones have been able to obtain more affordable insurance, which protects them against flood risk, via Flood Re.  However, Flood Re – due to restrictions that were put in when it was set up – does not reinsure commercial properties, homes built from 1 January 2009, and blocks of more than three residential flats.

“Many houses and flats built since 2009 are susceptible to flooding and it’s imperative the that policyholders, communities, government and the industry come together to ensure that we do all we can to ensure that households are well equipped to cope with both current and future flood risks”

The press release issued by PWC on 8 December 2022.

• UK’s largest 100 companies increased their Total Tax Contribution (TTC) by 5.2% to £81.5bn in 2021/22, according to a new study
• 100 Group Total Tax Contribution accounted for nearly 10% of total government receipts as the economy emerged from lockdown, but still remains below pre-pandemic levels
• 100 Group also contributed £25.8bn in capital investment and £10.9bn in R&D while employing 1.9m people

The UK’s biggest listed companies generated £81.5bn in tax during the 2021/22 financial year despite lockdowns and ongoing social distancing measures throughout much of 2021, according to a new study.

The 18th annual Total Tax Contribution of the 100 Group, produced by PwC, estimates the companies contributed £26bn in taxes borne – those that are a direct cost to the company – and a further £55.5bn in taxes collected, such as income tax and employee National Insurance Contributions (NICs) deducted under PAYE, for the year ended 31 March 2022.

The survey has been compiled from data provided by 95 of the largest listed companies in the UK, coinciding with the second year of the pandemic, and has been extrapolated to estimate the overall contribution of the 100 Group as a whole. The survey period includes the emergence from UK-wide lockdown in early 2021 and continued social distancing and remote working policies throughout much of the year

In 2021/22 the 100 Group’s tax contribution increased by 5.2% on a two-year trend basis. The increase in tax was driven by net VAT, corporation tax and fuel duty as the economy reopened. However, total tax receipts remain 3.3% lower than before the pandemic, due to the 8% decrease in 2020/21.

The survey also highlights that 100 Group capital investment rebounded by 39%, to a total of £25.8bn in 2021/22, following a decrease in the first year of the pandemic. Meanwhile, R&D expenditure continued to increase throughout the pandemic, rising by 8% to £10.9bn in 2022, following a 15% increase in 2020/21.

According to the survey, in 2021/22, the 100 Group employed approximately 1.9 million people, or 5.8% of the total UK workforce, paying an average wage of £37,514 and contributing employment taxes of £12,903 per employee on average.

Andy Agg, chairman of The 100 Group tax committee said,

“Notwithstanding the new social and economic challenges that have emerged in recent years, this year’s survey highlights the resilience and agility of the 100 Group companies as the UK started to emerge from the pandemic. This year’s findings demonstrate that businesses were willing to continue to invest and innovate to play their part in the economic recovery amid considerable uncertainty.

“It is also important to remember and appreciate the valuable support that the Government provided through this period, while also recognising the contribution of the 100 Group to the wider economy and communities around the UK.”

Andrew Packman, tax partner at PwC said,

“As we deal with the impact of geopolitical and economic instability, this report illustrates the key role of large companies in sustaining investment in capital projects and research and development while supporting large numbers of well paid jobs. The tax contribution is recovering from the impact of Covid and the amount generated for the Exchequer is all the more important as the government deals with the challenges of the public finances. In difficult times, large and resilient companies are particularly important to our economy.”

Total Tax Contribution in detail

The largest tax borne was again corporation tax, at 32.2% of total taxes borne (compared to 27.0% in 2020/21). Employer NICs is the second largest tax borne, at 25.1% of total taxes borne (compared to 26.6% in 2020/21). The third largest is business rates (17.0%) followed by irrecoverable VAT (13.8%).

For every £1 of corporation tax, £2.09 is paid in other business taxes borne. In 2005, the ratio was 1:1.

Employment taxes, at 29.9%, are the largest share of taxes collected (income tax deducted under PAYE: 22.5% and employee NIC: 7.4%) followed by fuel duties at 24.5%..

For every £1 of corporation tax borne by this group of companies, there is £6.65 of taxes collected.

Both taxes borne and taxes collected increased in this year’s survey, by 1.2% and 7.1% respectively. The TTC in 2022 is £4.5bn higher than in 2021.

The press release issued by PWC on 30 November 2022.

• Almost nine in ten (87%) UK adults believe people should have equivalent access to NHS services regardless of where they live, with those aged over 55 feeling most strongly about this
• Seven in ten of 18-24 year olds are likely to access private healthcare, compared to three in ten of those aged 55 and over
• Over three quarters of young people willing to access private healthcare would pay for at least one treatment using savings or their own money
• Improving wellbeing support for female NHS workers of menopausal age could reduce the turnover and absence of 9,000 staff per year

Younger people are twice as likely to access private healthcare in the next 12 months than those aged over 55, as health gaps remain between the rich and poor, according to a study by PwC on transforming healthcare.

A PwC survey of 2,000 people across the UK showed that whilst two in five people (43%) say they would use private healthcare, or a mix of private and the NHS, for at least one treatment, younger people aged 18 to 24 are more than twice as likely to do so. Seven in ten (77%) 18 to 24 year olds said they would use private healthcare, or a mix, for one thing or more, compared to three in ten (30%) of those aged 55 and over.

Over three quarters (78%) of those young people wanting to access private healthcare said they would pay for a treatment using savings or their own money, with others saying they would use health insurance (72%) and would ask for help from family and friends (65%).

Geographically, Londoners are three times more likely (63%) to be willing to access private healthcare for at least one treatment, compared to people living in the North East (22%). Black and ethnic minorities are also more likely to be willing to pay to access private healthcare for something with seven in ten (70%) people saying they would, compared to four in ten (41%) white people.

Karen Finlayson, PwC’s regional lead for government & health industries, said:

“Generation Z is empowered to take decision making into their own hands and their willingness to opt for private healthcare is a sign of this. As the first generation defined by the disruption of Covid, how they access services, including healthcare, is changing. They are used to operating remotely, accessing tech-enabled services, and want fast-paced options, and these behaviours are evident in how they want to manage their wellbeing and health.”

Regional inequalities

PwC’s report A fairer future: how can the NHS tackle health and social inequities? also explores regional inequalities and differences in attitudes and impact on health inequity.

Almost nine in ten (87%) UK adults believe people should have equivalent access to NHS services regardless of where they live. People aged over 55 felt most strongly about this (93%) compared to those aged 18-34 (78%). Regionally, people in Yorkshire and Humber think most strongly (93%) that people should have the same access to the NHS compared to those living in London (83%).

The Rt Hon Alan Milburn, senior advisor at PwC, said:

“Equity is at the heart of the NHS’ founding principles but in practice both access to care and health outcomes remain starkly unequal. Widening social divisions and the cost of living crisis make this the time for the NHS to make health equity a core priority for action. The public want the NHS to be a catalyst for greater fairness in our country. That means changing how services are provided, how resources are allocated and how staff are recruited.”

Workforce support

With a greater need for the NHS to focus on staff wellbeing due to the immense workforce pressures exacerbated by COVID-19, the report calls for an increase in the pace and scope of action on workforce wellbeing. This includes improving support for female NHS workers experiencing menopause symptoms, which could reduce the turnover and absence of 9,000 staff per year, according to PwC’s analysis.

With 1.4million employees, the NHS provides careers beyond doctors and nurses to occupations such as porters, ambulance staff and healthcare assistants. PwC’s report calls for the NHS to develop a social mobility strategy, including capturing data on its workforce’s socio-economic backgrounds in the same way as other diversity measures, such as race and gender.

PwC’s public polling found that people value the NHS creating economic value through employment more than delivering services at the lowest cost. People ranked world class skills (29%) and training and employment opportunities for the local population (26%) as the most important things the NHS should prioritise in recruitment and training of its workforce.

The press release issued by PWC on 18 November 2022.

Commenting on the Office of National Statistics retail sales index for Oct 2022, Lisa Hooker, Industry Leader for Consumer Markets at PwC, said:

While headline retail sales increased slightly in October on both a volume and pound note basis compared with the previous month, this was entirely due to the loss of a trading day in September for the Queen’s funeral.

Worryingly, on an annual basis, the 2.9% increase in overall retail sales excluding petrol was accounted for by the record inflation that was reported earlier this week. On a volume basis, shoppers were actually buying 6.7% less than last October.

Supermarkets were particularly hard hit last month, as shoppers bought less, wasted less and traded down to cheaper alternatives in the face of 16.4% inflation, a 45 year high. But, even apart from groceries, non-food sales continued to fall behind pre-pandemic levels as consumers started to cut back as the impact of higher energy and food bills hit and more is spent on second hand goods.

One saving grace for the high street is the return of shoppers from online into physical stores. The proportion of retail sales online, while higher than before the pandemic, continued to fall back, helped by both the mild weather and a growing preference for physical shopping among younger generations.

With little over a month to go until Christmas, retailers will be hoping that the picture improves. Particularly compared with the disappointment of last year when the Omicron variant cancelled many festive plans at the last minute. We think there is a good chance of one last hurrah before the tax rises announced in the Autumn Statement hit. For example, shoppers already tell us that they’ll be spending £0.5 billion more in the Black Friday sales next week.

However, with the country facing the biggest decline in real disposable income since the end of World War II, and continued cost headwinds in the form of higher energy and input costs and National Living Wage increases, there is no question that the retail sector will face unprecedented challenges in 2023.

The press release issued by PWC on 17 November 2022.

Despite the cost-of-living crisis, interest in Black Friday has held up. PwC unveiled its annual Black Friday research which gives a glimpse of how shoppers are kicking off the festive rush for retail.

Interest has maintained from last year, with 37% of consumers interested and may buy (up 2% from 2021) and 24% of consumers stating they will definitely buy – matching 2021 levels. This is in contrast to 2020 levels where only 16% of consumers planned to purchase in the Black Friday period.

With almost half of under 35s definitely spending (48%), interest from male shoppers sits 10% higher than than females. Amongst men, 29% plan to definitely purchase with 34% interested opposed to 19% of women definitely spending and 35% interested.

Kien Tan, Retail Director at PwC comments:

“With the World Cup approaching and the first opportunity to browse high streets without pandemic restrictions in three years, it may not be a surprise that almost two-thirds of men will be shopping over the Black Friday period, with the majority of them (57%) looking for new tech or electrical products.

By comparison, female shoppers intend to spend half as much as men (£168 vs £310), and are mostly using Black Friday to get a head start on Christmas shopping, with 71% planning to buy for their family.

Meanwhile, interest in Black Friday is highest amongst under 25s: 9 out of 10 Gen Zers say they’ll be looking for a bargain, and three-quarters of them are planning to buy a treat for themselves.”

PwC estimates the average spend per consumer to be around £238 which will add £0.5billion extra to the retail economy this year taking the overall spend on Black Friday bargains to £7.5billion.

Shoppers will predominantly be shopping for electricals (51%), fashion (32%) and Christmas stocking fillers (28%). Interest in homewares (25%) and beauty (24%) have increased slightly from 2021. Shoppers are also showing a renewed interest in shopping in store for a bargain rather than online, with 19% planning to hit the high street and 12% planning to click & collect – a 2% increase in both arenas from 2021. 69% plan to shop online – a 4% decrease from 2021.

Lisa Hooker, Industry Leader for Consumer Markets at PwC comments:

“There has been a lot of commentary that shoppers are less interested in Black Friday this year, but that is not what consumers are telling us, with expected spend estimated to be £0.5bn higher than last year as people look for treats and bargains or try to spread the cost of Christmas over a longer time period.

Consumers have been closely monitoring their favourite brands in anticipation of big ticket electronics, more pricey winter wear or Christmas stocking fillers being discounted, and they’re in search of bargains more than ever given rising inflation.

Despite the consumer spending headwinds, many retailers have held their nerve this year, with the lower levels of promotional activity we saw last Autumn continuing into 2022. However, many retailers will still see Black Friday as an opportunity to engage with their customers, clear excess stock, and offer value for money, so we are expecting the usual ramp-up in sales and discounts as we approach the end of November.”

The press release issued by PWC on 17 November 2022.

Raj Mody, global head of pensions at PwC comments on the triple lock and state pension:

“The Chancellor’s decision to retain the triple lock will ensure the state pension does not lose value in real terms. Based on September’s inflation rate of 10.1%, it will take the basic rate from £142 to £156 and the new state pension up from £185 to £204 a week. For the 12.5 million pensioners who fully rely on the state pension this will be welcome news.

“Looking forward, if the triple lock continues, then it’s likely that the state pension will catch up with the tax-free Personal Allowance by the end of the 5-year period that the Personal Allowance has been frozen for. That will create an interesting policy situation for future Governments, which may be better tackled earlier than later. To end up in the situation where the state pension itself is taxed seems odd, for the Government to give out with one hand and then take back with another.”

Roshni Patel, DC pensions and benefits lead at PwC comments on the lifetime allowance:

“There was no further news on the Lifetime Allowance or Annual Allowance, suggesting they will continue to remain frozen for two more years. People’s pensions savings will start catching up with the frozen Allowance. It equates to £53,000 per annum for a Defined Benefit (‘DB’) scheme member, and would deliver less than that for a Defined Contribution (‘DC’) member, maybe around £45,000 depending on the going rate for annuities at the time of retirement. Apart from the disparity between DB and DC savers, these amounts might seem a lot but won’t feel like that in real terms at the end of the frozen period.

“With the reduction in dividend and capital gains tax allowances, it does make saving into a pension or ISA more desirable, instead of holding investments directly.”

The press release issued by PWC on 17 November 2022.

Phil Vernon, head of ratings at PwC, says:

“The Chancellor has correctly identified that one of the core issues with business rates is that the tax rate is too high and so freezing the rates multiplier in 2023/4 and the introduction of a package to reduce the burden will be welcomed by many businesses. However, these announcements will have to dovetail with the effects of the revaluation next year, and so properties facing an increase in their rateable value will still see an increase in their rates bills.

“This package continues the focus on retail, leisure and hospitality businesses relief, upping the relief to 75% of rates payable. But with the relief being capped at £110,000 per business, larger retailers and other sectors will be facing full business rates bills.

“Confirmation that the rates revaluation will proceed alongside a transitional relief scheme that will focus only on those rate bills that are increasing, will provide some reassurance that the highest rises in business rates will be curtailed. But as with all revaluations we will see winners and losers. The new rateable values for 2023 are due to be released imminently and so we should soon have a much clearer idea of the effect on business from next year.”

The press release issued by PWC on 17 November 2022.

Colin Smith, Energy and Infrastructure Tax Partner at PwC UK said:

“The Chancellor has made changes to the Energy Profits Levy, both by extending its duration to March 2028 and raising the rate from 25% to 35%. Today’s announcements increase the overall tax rate on the UK’s oil & gas producers to 75%. The cash benefit of the investment allowance remains broadly unchanged for most expenditure.

“A new 45% Electricity Generator Levy will apply where UK nuclear, renewable and biomass sourced electricity generators sell electricity at prices over £75MWh from 2023 to 2028. The overall headline corporate income tax burden on these businesses will therefore be 70%. This levy, which is charged on revenue rather than profit, replaces the cost-plus revenue cap proposed in the Energy Prices Act.

“These tax increases are forecast to raise £34 billion between 2023 and 2028. The amount of revenue raised will depend on volatile energy prices and may be adversely impacted if higher tax rates and the uncertainty caused by frequent tax law changes reduce activity and investment in the UK’s energy sector.

“Improvement in R&D credits for large companies will be welcome, particularly for those investing in new technology and innovations to support energy transition projects.”

The press release issued by PWC on 17 November 2022.

Cara Haffey, Automotive Sector Leader at PwC UK, said:

“The shift to zero emission vehicles is well underway and through one lens today’s announcement can be seen as a way of leveling the playing field by ensuring those drivers pay their fair share of road taxes.  However the balance is that we need to encourage this transition to be more rapid and therefore we hope this is not a disincentive to change.

“Indeed, despite the existing challenges in the UK market around EV adoption, demand remains strong, with UK consumers ranking third in likelihood to invest in an EV. In fact our research showed that in July of this year 5% of consumers already own an electric vehicle, and a significant 31% plan to buy one in the next two years.

“Today’s change may dampen appetite, however, an opportunity may emerge for the private sector to offer more incentives to reduce  consumers’ initial outlay and answer customers’ needs  for vehicles  that take in price and ease of use.”