Brexit and Certified B corps, trade with Taiwan and Levelling Up Fund Subsidy Scheme

Brexit and Abba

On 3rd December 2022, The Times reported that the pop group Abba’s most recent top 20 hit, “ I Still Have Faith in You”, was a covert political statement about Brexit, according to an interview by The Times with the song’s lyricist, Abba member, Bjorn Ulvaeus.

Mr Ulvaeus is quoted as saying of the song, “Of course, it’s about the four of us …but it’s about other things as well. It’s about unions in general. As a matter of fact, I thought about Brexit and about Europe. Crass as it may be, it’s a beautiful thought, the European Union.”

“Sweet Dreams (Are Made of This)”, Bjorn (with respect to Eurythmics)!

Brexit and Certified B Corporations

According to the B Corp website, “Certified B Corporations, or B Corps, are companies verified by B Lab to meet high standards of social and environmental performance, transparency and accountability”. B Lab is a not-for profit organisation.

The B Corp website confirms that there are over 5,000 B Corps around the world, across 158 industries in 86 countries, with over 500,000 workers and explains that “our most challenging problems cannot be solved by governments and non-profits alone. By harnessing the power of business, B Corps commit to positively impact all stakeholders – workers, communities, customers, and our planet”.

In order to achieve and maintain B Corp certification, the B Corp website states that all B Corps must:

  • Complete the B Impact Assessment and achieve a verified to score of 80+ points  (apparently out of a possible 200 for governance, workers, community, environment and customers);
  • Meet the B Corp legal requirement – namely, by amending their Articles of Association as necessary to embed a commitment to consider the impact of decisions on all stakeholders; and
  • Sign the B Corp Agreement and the Declaration of Interdependence.

B Corps have to list their impact scores on the B Lab Directory and apply to recertify every three years.

B Corp certification has enjoyed enormous success but some have questioned whether the process is sufficiently ambitious and, in an article by Caroline Bullock of The Times published in that newspaper on 28th November 2022 entitled “How eco “gold standard “ may drive greenwashing” and with a strapline that “More than 1000 UK businesses have B Corp status but experts query its effectiveness”, such concerns were raised.  Other social and environmental platforms are noted in the article as offering a somewhat different format and there is a question as to whether these other formats are more or less effective in achieving their object than B Corp certification.

The Times article gives the last word to B Lab whose UK arm, according to the article, is a registered charity, with revenues of £1.6 million in 2021, fourteen employees and three trustees.  A spokesperson for B Lab is quoted in the article as saying: “B Corps are held legally accountable not just to shareholders, but to all stakeholders, such that a company has to continually consider the wider community and planet alongside profit. The vast majority of for-profit companies are structured to do the exact opposite.”

The development of the B Corp movement internationally is an example of global trends that appear to apply regardless of Brexit.

Brexit and Taiwan

At an international conference held in Shanghai on 19th – 21st October 2017  on “China-EU Relations and the Taiwan Question”, Christopher R Hughes from the London School of Economics and Political Science,  who was speaking on the topic of “Taiwan and the EU – Facing the Challenge of BREXIT”, was quoted as saying that “Taiwan’s government has expressed its hope that Brexit will not derail its long-standing efforts to develop economic relations with both the UK and the EU. Although an FTA [free trade agreement] with the EU has been a long-standing hope for Taiwan, in an article and speech delivered at Chatham House in January 2017, Taiwan’s “Representative” to the UK, David Lin, explained that his country’s strategy for dealing with Brexit has three objectives: enhancing trade and investment relations, including the signing of a trade agreement; expanding substantive cooperation in specific areas; developing a new sustainable strategy for the UK towards Asia”.

Fast forward to 7th November 2022 and UK Trade Minister, Greg Hands MP, visited Taiwan for 2 days to hold trade talks with the Taiwan Government. The accompanying UK Government press release expressed the UK Government’s clear intent to boost trade ties with Taiwan. The press release noted that “during the trade talks, Innovate UK will sign a Memorandum of Understanding (MoU) with the Ministry of Economic Affairs in Taiwan, pledging to increase collaboration on technology and innovation. This includes a £5 million funding commitment through to 2025 and support to UK businesses via a bespoke Innovation Programme between the UK and Taiwan”. The mainland Chinese Government criticised the holding of these trade talks but the UK Government seemed determined.

Very topically, the press release also noted that “as a leading manufacturer of semiconductors – the chips used in electronic devices like iPhones and electric vehicles – Taiwan is a key player in global supply chains” and stated that it was the UK Trade Minister’s intention to use the trade talks “to promote diversified, resilient supply chains and greater economic cooperation” with Taiwan.

On 18th November 2022, the UK Department for International Trade (DIT) published a factsheet on trade and investment between the UK and Taiwan, which showed that total trade in goods and services (exports plus imports) between the two countries was £8.1 billion in the four quarters to the end of Quarter 2 (Q2) 2022, an increase of 1.1% or £87 million from the four quarters to the end of Q2 2021. Of this £8.1 billion:

  • Total UK exports to Taiwan amounted to £3.5 billion in the four quarters to the end of Q2 2022 (a decrease of 12.5% or £491 million compared to the four quarters to the end of Q2 2021); and
  • Total UK imports from Taiwan amounted to £4.7 billion in the four quarters to the end of Q2 2022 (an increase of 14.1% or £578 million compared to the four quarters to the end of Q2 2021).

According to the factsheet, Taiwan was the UK’s 31st largest trading partner in the four quarters to the end of Q2 2022, accounting for 0.6% of total UK trade.

The factsheet also showed that, in 2020, the outward stock of foreign direct investment (FDI) from the UK in Taiwan was £2.9 billion, accounting for 0.2% of the total UK outward FDI stock and that, in the same year, the inward stock of FDI in the UK was £483 million.

The development of post-Brexit relations between the UK and Taiwan (as well as those between the EU and Taiwan) will no doubt continue to be closely scrutinised by interested stakeholders.

Brexit and UK’s Levelling Up Fund Subsidy Scheme

On 22nd December 2022, the UK Government announced the Levelling Up Fund Subsidy Scheme, which is due to run from 3rd January 2023 until 31st March 2029. The accompanying Guidance from the UK Government declared the Scheme to be in compliance with the UK-EU Trade and Cooperation Agreement 2020 and in compliance with the UK’s international commitments on subsidy control (including Article 10 of the Northern Ireland Protocol).

The Scheme is set up for specified activities falling into one of the two following categories:

  • The development of local infrastructure; and
  • Investment in land remediation.

Under the Scheme, subsidies may be awarded in the form of grants not exceeding £20 million per project. The Scheme sets out the general conditions for the grant of a subsidy under the Scheme, as well as the specific conditions (including on eligibility, eligible costs and subsidy ratios) relating to subsidies granted under each of the two categories. It also sets out transparency obligations for any subsidy awarded under the Scheme that exceeds the value of £100,000, rules on cumulation and rules relating to recovery of misused subsidies.

As the Subsidy Control Act 2022 comes into effect from 4th January 2023, the Scheme is a legacy scheme and, therefore, the subsidy control requirements set out in the Act do not apply except for the requirements as to transparency.