PwC weekly media briefing 31 March

31/03/21

This week’s topics: 

  • What the recent Suez Canal trade tensions mean for the UK economy

  • PwC announces new Deal for staff on the future of work

  • The results of PwC’s Global Crisis Survey 

  • How will the new operational resilience rules impact financial services? 

What the recent trade tensions mean for the UK economy

Hoa Duong, economist at PwC, said: 

  • The latest episode of trade disruption at the Suez Canal shows how reliant consumers and businesses are on physical trade flows, despite an increasingly digital world.

  • As a key UK trading partner, the US’s warning of increasing tariffs on certain UK exports to a maximum of 25% means that UK exporters would have to pay extra tariffs of £235.8m - about 0.4% of the value of goods exported to the US. 

  • This is equivalent to each working person in the UK paying an extra £7.50 per year in taxes to send British goods across the Atlantic Ocean.

  • However, in terms of services, we should soon see official sign off of a UK-EU deal for financial services, but the main game changer here is a set of equivalence, and with a 22:1 score for the EU (meaning the UK has granted the EU equivalence in 22 areas while the EU has only temporarily granted the UK 1), there is clearly more to be done.

  • The absence of balanced mutual market access for financial services would negatively impact both sides of the Channel, resulting in a 0.3% loss in annual gross value added for the EU27 and 1.3% loss for the UK by 2030. In 2020 prices this is equivalent to around £600 loss in output per UK adult per year. There is every incentive therefore for the EU and UK to work towards more balanced market access.

PwC announces new Deal for staff on the future of work

  • As part of the new deal, PwC is introducing the concept of an ‘Empowered day’ - this means people can decide their own working pattern, for example starting early in the morning to be able to finish earlier in the afternoon, starting at lunchtime working through into the evening, or working in blocks of time to allow us to free up the middle of the day.

  • Secondly, the firm is setting the expectation that most of us will on average spend around 40 to 60% of our time co-located with colleagues. So that could either be in one of our offices or it could be at a client site. 

  • Finally, where it’s possible, we’re introducing summer working hours during July and August for this year - giving our people the opportunity to condense working hours in the week in order to finish early on a Friday.

Laura Hinton, Chief People Officer at PwC UK, said:

  • The impact of the pandemic on where and how we work has created an exciting opportunity for us to take a step back and review what it really means to work at PwC. We’ve been looking ahead to a brighter, post-pandemic future and exploring the bold new moves that we can make now that will make a real difference to our people. 

  • The discussions we’ve had over the past year, along with the recent Future of Work survey that our people carried out, have all helped to shape the new Deal framework.

  • Core to our new Deal is the principle of ‘Empowered Flexibility’ which is an evolution of our Everyday Flexibility policy. To some extent, this reflects how we’ve all been working over the last few months, but for me, it is much more than that. 

  • The new Deal recognises that we all have a unique set of skills, circumstances and priorities, and builds on the hard work, commitment and agility that our people have demonstrated over the last 12 months. Ultimately, it’s based on trust and the concept of two-way flexibility, giving people more freedom to work in a way that better works for them, but also meets the needs of teams, the wider firm and our clients.  

  • I’m really excited about what this means for all of us and for our firm, and the important role that we can play in shaping the future of work.

Kevin Ellis, Chairman and Senior Partner at PwC UK, added:

  • We’ve long promoted flexible working, and we hope today’s announcements make it much more the norm rather than the exception. The future of work is changing at such a pace we have to evolve continually how we do things to meet the needs of our people and our clients.

 

The results of PwC’s Global Crisis Survey 

Between August 2020 and January 2021, PwC surveyed over 2800 business leaders globally (including 268 from the UK) for its Global Crisis Survey 2021 to find out how they responded and what they learned during the pandemic. 

Bobbie Ramsden-Knowles, Crisis Management Director, PwC UK said:

  • As business leaders worldwide assess their response to the COVID-19 pandemic, there is a renewed focus on organisational resilience. Half of Global Crisis Survey respondents are reviewing the value organisational resilience brings to their business and the senior sponsorship required to build the discipline effectively.  

  • If companies have not already undertaken a lessons learned exercise, or After Action Review, now is the time to examine their response to COVID-19 and integrate those lessons in order to better prepare for future disruptions. As of March 2021, only 44% of UK organisations have conducted an After Action Review.

  • More than 95% of UK business leaders report that their crisis management capabilities need improvement. Organisations are prioritising the need to secure the appropriate skills, competencies and personal resilience required for their crisis teams and leaders to operate effectively under pressure.

  • As a result of the challenges encountered when responding to the pandemic, 68% of UK organisations are investing in technology, acknowledging its critical role in helping organisations anticipate, prepare for and respond to issues and crises. 

  • Organisations are increasingly expected to make pivotal decisions quickly, informed by easily accessible, accurate and thorough data. However, more than a third (34%) of UK organisations have had difficulty gathering data to inform and support their response to COVID-19 -- specifically their decision-making and communication to stakeholders. 

 

How will the new operational resilience rules impact financial services firms?

The Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA), and the Bank of England  have set out new rules regarding outsourcing and third party risk. Firms will now have to consider, amongst other things, how disruption can impact the services they provide beyond their own commercial interests. 

Rakesh Majithia, Head of Outsourcing and Third Party Risk at PwC UK said:

  • The publication of these final papers should give firms the confidence they need to drive forward their resilience agenda. 

  • While firms' experiences in coping with COVID-19 will have presented a good test of their response to the pandemic, they should remain mindful of how they’ll respond should there be a ransomware attack or if a critical third party is disrupted.

  • Indeed, firms have been reminded that they remain fully accountable for the end-to-end delivery of business services to their customers whether they deliver them in-house or using third parties.

  • I see the new rules as marking the end of the beginning not the beginning of the end. They represent a shift in how firms should look at the role they play in the financial ecosystem and how they should prepare themselves to cope with incidents that will inevitably occur.

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 155 countries with over 284,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2021 PwC. All rights reserved

Contact us

Rebecca Lloyd

Manager, Corporate Affairs, PwC United Kingdom

Tel: +44 (0)7483 329628

Follow us