UK PESTLE ANALYSIS

COMPILED BY
KAVITA BAEET MILIND SARVAGOD RADHIKA VAZE ROLL NO 10 ROLL NO 11 ROLL NO 12

BATCH 30 , ITM , MATUNGA

INTRODUCTION
Official Name United Kingdom of Great Britain and Northern Ireland
London 62.2 million 244,108 sq km Pound Sterling Church of England (Anglican), Roman Catholic, Church of Scotland (Presbyterian), Muslim 100% English, Welsh, Scots and Gaelic

Capital Population Area Currency Religion

Literacy Languages

Major Cities
Climate

London, Manchester, and Birmingham

Moist with moderate temperatures

POLITICAL MAP

Government Type: Constitutional monarchy. Constitution: Unwritten; partly statutes, partly common law and practice. Branches: Executive--monarch (head of state), prime minister (head of government), cabinet. Legislative--bicameral Parliament: House of Commons, House of Lords; Scottish Parliament, Welsh Assembly, and Northern Ireland Assembly. Judicial--magistrates' courts, county courts, high courts, appellate courts, House of Lords, Supreme Court. Subdivisions: Scotland, Wales, Northern Ireland (municipalities, counties, and parliamentary constituencies). Political parties: Conservative, Labour, Liberal Democrats, UK Independence Party, British National Party, Green Party; also, in Scotland--Scottish National Party. Wales-Plaid Cymru (Party of Wales). Northern Ireland--Ulster Unionist Party, Social Democratic and Labour Party, Democratic Unionist Party, Sinn Fein, Alliance Party, Progressive Unionist Party. Suffrage: British subjects and citizens of other Commonwealth countries and the Irish Republic resident in the U.K., at 18.

1979 - 1997 : The Conservative government (Margaret Thatcher and John Major) was a firm believer in the privatisation of public corporations. 1997-2010 :The Labour government that had been in power first under Prime Minister Tony Blair and then under his successor, Gordon Brown, lost its majority in the House of Commons in the May 6, 2010 election At Present Principal Government Officials Head of State--Queen Elizabeth II Prime Minister (Head of Government)--David Cameron (Conservative Party) Deputy Prime Minister--Nick Clegg (Liberal Democrat Party) Secretary of State for Foreign and Commonwealth Affairs--William Hague Ambassador to the U.S.--Nigel Sheinwald Ambassador to the UN--Mark Lyall Grant

Strengths
1) Has the economic resources to survive 2) Good industrial relations 3)Political willingness to adapt to changing world 4)Good education system compared to most countries 5)English as first language and is the world language therefore improves business. 6) Recovering economy 7)Improvement of management 8)Low unemployment

Opportunities
Reductions in barriers to trade therefore increasing trade partners Fill skills gap from migrants( Proposed policy on CAP on migration however may be otherwise) Larger market in which to trade

Weaknesses

Threats
Increased competition due to cheaper labour etc

1) Strong pound makes exports expensive 2)Skills shortage 3)Not enough R+D

Businesses relocated abroad due to cheaper costs Reduced E.U. spending on UK as new countries require investment Cheaper imports from abroad

4)Inefficient industry

ECONOMIC FACTORS The first country in the world to industrialise in the 18th and 19th centuries. The extensive war efforts of both World wars in the 20th Century and the dismantlement of the British Empire also weakened the UK economy in global terms The 6th largest economy in the world by nominal GDP The capital, London, is a major financial centre for international business and commerce. The British economy is substantially boosted by North Sea oil and gas reserves, worth an estimated 246.2 Billion in 2007. In 1973, the UK acceded to the European Economic Community which is now known as the European Union after the ratification of the Treaty of Maastricht in 1993.

The UK entered its worst recession since World War 2 in 2008.

. In response to the financial crisis, the British Government implemented a wide-ranging stability and recovery plan that included a fiscal stimulus package, bank recapitalization, and credit stimulus schemes. The UK economy grew by 1.1 per cent in Q2 of 2010, the fastest growth in 4 years, accelerating from the 0.3 per cent growth recorded in Q1 of 2010 and 0.4

Statistics GDP: $2.183 trillion (2009) (nominal;6th) $2.159 trillion (2009) (PPP; 6th) GDP growth1.6% (2009/10) GDP per capita$32,798 (2009) (nom; 22nd) $35,286 (2009)(PPP; 19th)

GDP by sector: Agriculture (1.2%), Industry (23.8%), Services (75%) (2009 Inflation (CPI)3.2% (March 2010)
Population below poverty line14% with household income below 60% of UK median income (2006.)

Gini index 34 (2005)

Labour force31.25 million (2009 est.) (17th) Agriculture: 1.4%; Industry: 18.2%; Services: 80.4% (2006) Unemployment:7.8% (Q4 2009)

Main industries :machine tools, industrial equipment, scientific equipment, shipbuilding, aircraft, motor vehicles and parts, electronic machinery, computers, processed metals, chemical products, coal mining, oil production, paper, food processing, textiles, clothing and other consumer goods.

External Exports:$351.3 billion (2009 ) Export goods :manufactured goods, fuels, chemicals; food, beverages, tobacco

Main export partners :United States 13.8%, Germany 11.5%, Netherlands 7.8%, France 7.6%, Ireland 7.5%, Belgium 5.3%, Spain 4.1% (2008)
Imports$473.6 billion (2009 .)

Import goods: manufactured goods, machinery, fuels; foodstuffs

Main import partners:Germany 13%, United States 8.7%, China 7.5%, Netherlands 7.4%, France 6.8%, Norway 6%, Belgium 4.7%, Italy 4.1% (2008) FDIstock:$1.025 trillion (31 December 2009 ) Gross external debt$9.088 trillion (30 June 2009) (2nd)

The main taxes in the UK are: Income tax National Insurance contributions: Corporation tax: Capital Gains tax:. Inheritance tax. Excise duties. Value-Added tax. Council Tax.

Product Medicines Petrol Cars Other oils

Valu e bn# 16.9 12.4 11.8 9.9 9.6 7.6 5.6

%ge Rise/ fall 16.1 25.6 23 22.4 22.5 0.5 10.6

Engines/ Motors
Aerospace Telecoms Organoinorganic compounds Measuring/ Analysing Instruments Alcoholic Beverages

5.3

47.4

4.8 4.6

1.6 6.6

SOCIAL FACTORS

Technology The European Innovation Scoreboard 2008 ranks the UK one of the innovation leaders, with innovation performance well above that of the EU average and all other countries. (Source: European Innovation Scoreboard, 2008). The UK has claim to 23 Nobel prizes in the life sciences. (medicine and chemistry). UK researchers produce 16 research papers per US$1 million of research funding (compared with 9.2 papers in the U.S. and 3.6 in Japan). Source: ABPI 2008 Tax credits for research and development Research and development (R&D) tax credits are available for large corporations and SMEs investing in R&D: Large corporations R&D In addition to the normal 100 per cent deduction, large companies are entitled to a further deduction from their taxable income of 30 per cent of their current spending on qualifying R&D. For example, if a company spends 100,000 on qualifying R&D, it will be able to deduct 100,000 from its taxable income under ordinary tax rules and an additional 30,000 under the R&D tax credit. SMEs R&D In addition to the normal 100 per cent deduction, SMEs are entitled to a further deduction from their taxable income of 75 per cent of their current spending on qualifying R&D (for the purposes of this scheme only, an SME is defined as a company employing up to 500 people).

CENTRAL GOVERNMENT Parliament

Responsibilities Primary legislation

NATIONAL ORGANISATIONS The Scottish Parliament; the Welsh Parliament; the Northern Ireland Assembly

LOCAL GOVERNMENT Local authorities London boroughs

Cabinet office The Treasury

Public service reform Economic policy

Social Exclusion Task Force Her Majesty's Revenue and Customs (taxation; tax credits and social security contributions) National Health Service Community care

Government finance

LEGAL FACTOR

Department of Health Department for Work and Pensions

Health care

Social Services
National Insurance Social Assistance Employment Pensions, Disability and Carers Service (formerly the Benefits Agency); Child Support Agency ; JobCentre Plus (formerly Benefits Agency/ Employment Service) Planning; housing; environmental health Probation service; immigration service; prisons Police

The administration of welfare in the UK

Department for Communities and Local Government Ministry of Justice

Local government; Urban policy; Housing Law and order

Fire Schools; Education welfare; Learning disability (5-18); children's services

Department for Children, Schools and Families

Education

CONSUMER PROTECTION LEGISLATION

The Trade Descriptions Act, 1968: This makes it illegal for a business to provide false or misleading descriptions of their products, services, accommodation and facilities. The Unsolicited Goods Act, 1971: This stated that unsolicited goods become the property of the recipient if the sender does not retrieve them from the recipient within 30 days of notice. The Consumer Credit Act, 1974: This states that any business which offers credit facilities must obtain a licence from the Director-General of Fair Trading and must also display the annual percentage rate (A.P.R) that will be charged. The Sale of Goods Act, 1979: This states that goods must be of merchantable quality, as described in their advertisements and fit for their purpose. The Consumer Protection Act, 1987: This states that it is an offence for a business to give a false or misleading price indication on its product(s) AND businesses are liable for any damage and injury that their defective products cause to consumers. The Food Safety Act, 1990: This states that it is an offence for a business to sell food if it is not registered to do so and also if those handling the food have not been appropriately trained. It also states that the food must be of the expected nature and quality that is demanded by the consumer.

Employee Protection Legislation

1)The Employment Relations Bill, 1999: Stating that employees who have been in employment with the same business for a period of one year have the right not to be unfairly dismissed. 2)The Employment Rights Act, 1996: Covering unfair dismissal, redundancy and maternity. 3)The Public Interest Disclosure Act, 1998: Covering employees who disclose confidential information. 4)The Health & Safety at Work Act, 1974: Covering working conditions and the provision of safety equipment, hygiene, etc). 5)The National Minimum Wage Act, 1999: Making it illegal for employers to pay less than 3.60 per hour to its full-time staff who are aged over 21. 6)The Equal Pay Act, 1970: stating that pay and working conditions must be equal for employees of the opposite sex who are performing the same work. 7)The Sex Discrimination Act, 1975: Stating that it is illegal to discriminate against an employee, or an applicant for a job, on the grounds of their sex and/or their marital status. 8)The Race Relations Act, 1976: Stating that it is illegal for an employer to discriminate against an employee, or an applicant for a job, on the grounds of their ethnic background. 9)The Disability Discrimination Act, 1995: Stating that it is illegal for a business with 20 or more employees to discriminate against an employee, or an applicant for a job, on the grounds of their disability.

Competition Legislation Office of Fair Trading (O.F.T). Monopolies and Mergers Commission (M.M.C) Competition Commission

1) FRAMEWORK FOR UK ENVIRONMENTAL REGULATIONS Protecting the environment is a key focus for the UK Government. commitment to reduce emissions of carbon dioxide by 80% by 2050 (compared to 1990 levels) Target to recover at least 74% of packaging waste ensure that by the end of 2010,

Rise in Recyclable material collected from households in England possibly as a result of more recycling schemes and collections being introduced.
Despite increased awareness of environmental issues, nearly one-quarter (24 per cent) of adults aged 16 and over in England in 2007 left their television on stand-by overnight. Within the UK, the key environmental regulators are: in England and Wales: the Environment Agency www.environment-agency.gov.uk/ in Northern Ireland: the Northern Ireland Environment Agency www.ni-environment.gov.uk/ in Scotland: the Scottish Environment Protection Agency www.sepa.org.uk/

2) KEY ENVIRONMENTAL REGULATIONS A)The key environmental regulations in the UK cover the following areas: a) Air b) Hazardous substances c) Land d) Packaging e) Waste and recycling f) Water B)Environmental permits or licences FOR a) The discharge of liquid waste to public sewers, b) The handling or storage of hazardous waste c) The emission of specific substances. 3)ENVIRONMENTAL TAX ALLOWANCES AND LEVIES

Envirowise www.envirowise.gov.uk

An organisation that delivers a governmentfunded programme of free, confidential environmental advice to UK businesses.

The Carbon Trust www.carbontrust.co.uk/default.ct

Helps business to reduce carbon emissions and supports the development of low carbon technologies.

The European Environment Agency www.eea.europa.eu/

Supports sustainable development and helps to achieve significant and measurable improvement in Europes environment through the provision of information.

The Chartered Institute of Wastes Management www.ciwm.co.uk/

A professional body which represents over 7,000 waste management professionals.

The Environmental Services Association www.esauk.org/

Represents the UKs waste management and secondary resources industry.

The Chartered Institute of Environmental Health www.cieh.org/

A professional, awarding and campaigning body focusing on environmental health and safety.

The Chartered Institution of

A professional and examining body for

CONCLUSION
Top 20 reasons to do business in the UK What makes the UK Europes leading investment destination for companies relocating and developing their global business? We look at 20 of the top reasons setting the UK apart from other countries. 1. The easiest place to set up and run a business in Europe: The World Bank found that it takes 13 days to set up a business in UK, compared to the European average of 15 days. It ranks the UK first in Europe and fifth in the world to operate a business. Source: Doing Business 2010. 2. An Internationally Competitive tax environment for foreign investors: The top corporate rate is 28 per cent, the lowest in the G7 and below most of the UKs core competitors. The UK has reduced its corporate tax rate from over 50% in the early 1980s, down to one of the lowest in the industrialised world. The UKs highest personal tax band, at 40 per cent, is one of the most competitive in Western Europe. Source: Deloitte, 2009. Ernest & Young/ Forbes, 2009. 3. The best place in Europe for doing business: The World Banks Doing Business 2010 ranks the UK fifth in the world on Ease of Doing Business making the highest ranking country in Europe. Source: World Bank. Doing Business 2010. 4. The least number of barriers to entrepreneurship in the world: The OECD noted that the UK is fifth in the world for Product Market Regulation, has the least barriers to entrepreneurship in the world and has the third least barriers to trade and investment in the world. Source: OECD, 2008. 5. A leader in innovation: The European Innovation Scoreboard 2008 ranks the UK one of the innovation leaders, with innovation performance well above that of the EU average and all other countries. (Source: European Innovation Scoreboard, 2008).

6. One of the most stable political environments to do business (IN SPITE OF COALITION GOVT.) According to Transparency International, the UK is one of the most transparent (least corrupt) countries in the world. It has a higher rating than France, Belgium, USA and Japan. 7. Stable regulatory environment: The UK has a consultative approach to the formulation of regulation, so there are no surprises for business. 8. One of the easiest countries to register a property: To register a property, the UK is ranked above USA, Japan, France, Germany, Italy and Canada. Source: World Bank. Doing Business 2010 9. Speaking in the international language of business: operating in English gives firms in the UK a natural advantage when communicating globally. 10. Progressive communications network: The UK has the most extensive broadband market among the G8 countries and one of the strongest ICT infrastructures in the world. (Source: OECD Broadband Portal). 11. Home to Europes number one city for business for the 20th year running in 2009 by the European Cities Monitor: London is the world's leading financial services centre on a number of key performance indicators and was voted top in Europe.

12. Top talent: According to the Times Higher Education Supplement (THES), the UK has the top five universities in Europe and two of the top four globally. (Source: The Times Higher Education Supplement, 2009) 13. Springboard to Europe: The UK is the number one gateway to Europe, giving easy access to the 27 member states of the European Union, the world's largest single market, with its population of nearly 500 million. 14. The UK has claim to 23 Nobel prizes in the life sciences. (medicine and chemistry). UK researchers produce 16 research papers per US$1 million of research funding (compared with 9.2 papers in the U.S. and 3.6 in Japan). Source: ABPI 2008 15. Number one location for European headquarters: More overseas companies set up their European headquarters in the UK than anywhere else. (Source: European Investment Monitor) 16. Olympic opportunities: London will host the Olympic Games in 2012. Procurement started in 2007. Contracts are available for firms of all sizes and the total budget will run into billions.

17. Outstanding transport links: The UK offers world class transport links. Heathrow's new Terminal 5 is now open and working efficiently. Additional expansion is planned for international airports at Stansted and London City; for sea container terminals at London Gateway and Felixstowe; and for the rail network, with investment in London Cross Rail and rail freight infrastructure. 18. High quality of living: UK residents enjoy a high standard of living, education and recreation. Personal taxes are low, publicly-funded health is free to all and there is a rich cultural heritage and abundance of leisure facilities. 19. Magnet for foreign investment: In 2009, the UK attracted 432 new investments and expansion of existing investments, the highest in Europe. (Source: European Investment Monitor, December 2009) 20. Productivity rapidly increasing: Historically, the UK had lower productivity than its main competitors, but this is changing and the UK has closed the gap with many countries and overtaken others