UK PESTLE ANALYSIS

COMPILED BY
KAVITA BAEET ROLL NO 10
MILIND SARVAGOD ROLL NO 11
RADHIKA VAZE ROLL NO 12
BATCH 30 , ITM , MATUNGA
 INTRODUCTION

Official Name United Kingdom of Great Britain and

Northern Ireland

Capital London

Population 62.2 million

Area 244,108 sq km

Currency Pound Sterling

Religion Church of England (Anglican), Roman

Catholic, Church of Scotland (Presbyterian),
Muslim
Literacy 100%

Languages English, Welsh, Scots and Gaelic

Major Cities London, Manchester, and Birmingham

Climate 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
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)

3)Political willingness to adapt to changing world Larger market in which to trade

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  

Weaknesses Threats
Increased competition due to cheaper labour etc

1) Strong pound makes exports expensive Businesses relocated abroad due to cheaper costs

Reduced E.U. spending on UK as new countries

2)Skills shortage require investment
3)Not enough R+D 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
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.
 Valu %ge
e Rise/
Product bn# fall
Medicines 16.9 16.1
Petrol 12.4 25.6
Cars 11.8 23
Other oils 9.9 22.4
Engines/
Motors 9.6 22.5
Aerospace 7.6 0.5
Telecoms 5.6 10.6
Organo-
inorganic
compounds 5.3 47.4
Measuring/
Analysing
Instruments 4.8 1.6
Alcoholic
Beverages 4.6 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 Responsibilities NATIONAL LOCAL
GOVERNMENT ORGANISATIONS GOVERNMENT
Parliament Primary legislation The Scottish Parliament; Local authorities
the Welsh Parliament; the London
Northern Ireland Assembly boroughs

Cabinet office Public service Social Exclusion Task  

reform Force
The Treasury Economic policy Her Majesty's Revenue  
and Customs (taxation;
tax credits and social The
Government security contributions)
finance administration
LEGAL Department of Health care National Health Service Community care of welfare
Health
FACTOR Social Services in the UK
Department for National Pensions, Disability and  
Work and Pensions Insurance Carers Service (formerly
the Benefits Agency);
Social Assistance Child Support Agency ;

Employment JobCentre Plus (formerly

Benefits Agency/
Employment Service)

Department for Local   Planning; housing;

Communities and government; environmental
Local Government Urban policy; health
Housing
Ministry of Justice Law and order Probation service; Police
immigration service;
prisons Fire

Department for Education   Schools; Education

Children, Schools welfare; Learning
and Families disability (5-18);
children's services
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
 
The Carbon Trust
www.carbontrust.co.uk/default.ct
 
The European Environment Agency
www.eea.europa.eu/
 
 
The Chartered Institute of Wastes
Management
www.ciwm.co.uk/
The Environmental Services
Association
www.esauk.org/
The Chartered Institute of
Environmental Health
www.cieh.org/
The Chartered Institution of
An organisation that delivers a
governmentfunded
programme of free, confidential
environmental advice to UK businesses.
Helps business to reduce carbon emissions
and supports the development of low carbon
technologies.
Supports sustainable development and helps
to achieve significant and measurable
improvement in Europe’s environment
through the provision of information.
A professional body which represents over
7,000 waste management professionals.
 
Represents the UK’s waste management and
secondary resources industry.
 
A professional, awarding and campaigning
body focusing on environmental health and
safety.
A professional and examining body for
 CONCLUSION
Top 20 reasons to do business in the UK
What makes the UK Europe’s 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 UK’s 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 UK’s 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 Bank’s 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 Europe’s 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