In an effort to avoid post-Brexit tariffs, a third of British businesses are looking for UK firms to replace EU suppliers. Meanwhile, nearly half of EU businesses working with UK suppliers are in the process of finding local replacements.
The figures are revealed in a new survey by the Chartered Institute of Procurement and Supply (CIPS), which found that 32% of UK businesses who work with suppliers on the continent are actively looking for alternative suppliers based in the UK.
For those trading with other Member States, UK-based suppliers are set to lose out as 45% of businesses currently using them seek non-UK replacements.
The survey of more than 2100 supply chain managers also found that 36% of UK businesses are intending to respond to Brexit by beating down supplier prices and that 11% of firms think that part of their operations may no longer be viable.
Although both UK and European supply chain managers agree that the main priority for the Brexit negotiations should be to keep tariffs and quotas to a minimum, those in the UK with responsibilities for brokering international deals believe there are serious obstacles to achieving that objective.
More than a third (39%) said they thought that the UK is in a weak position to negotiate and 36% cited lack of time as a major factor in achieving a good deal.
Even more worryingly, 33% of respondents believe that the UK has a dearth of supply chain expertise and knowledge to draw on.
Commenting for the CIPS, Gerry Walsh noted that both European and British businesses will be ready to reroute their supply chains in 2019 if trade negotiations fail – they are not wasting time to see what happens.
“The separation of the UK from Europe is already well underway even before formal negotiations have begun,” he added.
Companies trading with Qatar are becoming increasingly concerned about the severing of diplomatic ties with that country on 4 June by Saudi Arabia, the UAE, Bahrain and Egypt. Saudi Arabia, the UAE, Bahrain and Egypt have implemented what is effectively a blockade against Qatar, closing airspace and territorial waters and preventing onward shipment of goods traditionally routed through them. This is of greatest concern to companies which might have goods destined for Qatar now ‘stuck in transit’ in Saudi Arabia, the UAE, Bahrain and Egypt, particularly those with Letters of Credit stipulating delivery by specific dates to secure payment. UK exporters are being encouraged to discuss with their shipping agents alternative routes into Qatar but a threat of wider action by Yemen, Libya and the Maldives could further complicate arrangements. The British Chamber of Commerce in Qatar has issued a statement which said: “On 4 June 2017, Saudi Arabia, United Arab Emirates, Bahrain and Egypt cut diplomatic ties with Qatar. This has led to closures affecting road, air and sea routes between these countries and Qatar, as well as travel and residence restrictions affecting Qatari nationals. Restrictions on entry to the UAE have also been placed on certain holders of Qatari Residence Permits. These restrictions don’t apply to British nationals. As of 6 June 2017, the land border between Qatar and Saudi Arabia is closed. All flights between Qatar and Saudi Arabia, United Arab Emirates, Egypt and Bahrain are suspended until further notice. These measures are likely to lead to some disruption for travellers in the region. You should check with your airline before you travel. Direct flights to and from the UK aren’t affected. Travellers should also check with the FCO Travel Advice for Qatar which is being updated regularly. Trade with Qatar is similarly affected by the closure of ports and road borders to Qatar bound shipments. Companies with goods in transit to Qatar should check with their shipping and handling agents to determine how best to ensure the shipments can reach Qatar. Local shipping agents in Qatar can advise on what new routes are proving most reliable and effective. For companies that have future business in Qatar, the Qatar government has emphasised that its ports and the airport remain open and they are operating business as usual. The British Chamber of Commerce in Qatar judges the embargo to be only temporary in nature but it is not possible to say how long it will continue. Further information will be posted as and when the situation changes.”
Ahead of the general election, Norfolk Chamber is setting out the key Norfolk business asks for any future government and is calling for support for Norfolk exporters and for the government to work with businesses to secure the best possible deal with the EU.
Commenting on the need to support Norfolk’s exporters, Esther Evans, member of Norfolk Chamber’s Board and Managing Director of STM Packaging Group Ltd said:
“Many of Norfolk’s most successful businesses are staying very positive about Brexit and ensuring they are in a good position to take advantage of any opportunities that arise.
“To give Norfolk companies greater confidence over the next two years, we want to see down to earth and sensible dialogue on business issues from any future government, but we would also like to see the government working closely with businesses of all sizes to help deliver the best possible deal with the EU and deliver the most advantageous economic environment in which Norfolk’s exporters can thrive and grow. This can be achieved by canvasing opinions and utilising all the region’s best business talent via the voice of the Chamber of Commerce.”
“Brexit is also a fantastic opportunity for the UK Government to lighten the regulatory burden on businesses in order to stimulate business growth and innovation. Norfolk businesses have a huge capacity for both growth and innovation, and are perfectly placed to take advantage of these opportunities so that they can offer greater employment and improved skills opportunities to all current and many new employees.”
Nova Fairbank, Public Affairs Manager for Norfolk Chamber outlined what Chamber members want to see as part of the Brexit negotiations:
Business Voice: support Norfolk exporters to drive economic growth. Develop trade policy with business, and leverage Chambers of Commerce, which are best placed to provide stable export support in all regions of the UK.
Labour: Protect the rights of existing EU workers to stay in the UK. Create a future UK immigration system that is responsive to economic needs and skills shortages at all levels, and ensure that there is no hard border between Northern Ireland and the Republic of Ireland.
International Trade: Tariffs need to be kept to a minimum, with simplified customs procedures to make exporting as easy as possible. To grow our export capacity, swift trade agreements with countries should be reached and trade missions should be expanded.
Standards: Product standards should be aligned and recognised by the EU, to ensure that Norfolk products remain competitive.
Funding: UK funding levels for business and people development need to be maintained in Norfolk to the levels that were formally funded from the EU.
Norfolk Chamber members are already noting how Brexit has impacted on their businesses so far:
Gordon Chetwood, Managing Director of Pasta Foods said:
“Pasta Foods has seen an upward path since the UK’s Brexit vote. Most of our pasta competitors are European businesses supplying into the UK, so the devaluation of the pound makes us more competitive to UK customers, in spite of the fact that we have faced rising costs, as we buy raw materials from Europe.
“In our snack business, we export snacks across the world to over 40 countries and we have seen very good sales growth in spite of raw material cost inflation and we anticipate that this will continue into the future.”
Alex Durand, Chief Executive of SaxonAir Charter Ltd said:
“Brexit has shown no signs of affecting our business yet, but as the majority of our flight operations are international, and particularly to, from and around Europe, it has the potential to significantly damage our business. Our view is that we need to prepare ourselves both for the good or the bad – there may be new opportunities created, or we may have to dramatically change our business. Either way, our approach needs to be the same: we have less than two years to make our business as efficient and dynamic as possible.”
Huw Sayer, Director of Business Writers said:
“Surprisingly, the Brexit vote has been good for our business so far but longer term uncertainties remain. Several of our European clients have already asked us to write marketing material emphasising their continued access to the EU single market and a pan-European supply chain.
“We have also been writing case studies for inward investment agency clients, showing how they can advise and support UK companies looking to future proof their business by establishing a base in the EU. The main threat we see is to our UK manufacturing and financial services clients, who may find themselves trading under WTO rules if the UK government does not secure a negotiated settlement.”
Sean Clark, Director of Clark St James said:
“Clients in the financial industry, based around stock investment, have severely cut their advertising spend as uncertainty is delaying potential investors from making any significant investment decisions. Travel and tourism advertising spend is up within the “staycation” market as the exchange rate makes it more beneficial to holiday in the UK.”
Norfolk Chamber, in addition to providing services for its membership, also has a key influencing role for the wider business community. To ensure our Board of Directors remains representative of the Norfolk business community as a whole, we need to recruit at least 3 new Board Directors
Commenting on the type of candidates being sought, Chris Sargisson, Chief Executive of Norfolk Chamber said:
“We have a diverse and innovative business community in Norfolk and it is imperative that the make-up of our Board reflects the huge amount of talent that can be found within the Chamber membership. We are particularly interested in recruiting from the following sectors: Tourism, Logistics, Construction, Manufacturing and Health & Social Care. Although we would not exclude other sectors from being considered.”
The deadline for applications to be received is Friday 18 August 2017 and interviews will be held on Wednesday 14 September 2017. Successful candidates will be notified of interview by the end of August. For more information on the role and to apply please click here.
From local standout to national champion: BCC Chamber Awards will put best of British business on the map.
Businesses from across the country are invited to take part and showcase their talents and achievements through a series of regional heats, culminating in the national final, which takes place in London on 30 November 2017.
Chris Sargisson, Chief Executive of Norfolk Chamber said:
“Norfolk companies can boast many areas of business excellence. The Chamber Awards allow us the opportunity to highlight some of our county’s many business achievements and I would encourage any business to showcase their achievements by entering these awards.”
Companies can enter nine categories, covering people development; customer care; business/education; export; health and wellbeing; and technology.
The Awards will be demonstrating the very best of business, highlighting the positive contribution that businesses make to the UK economy and to society as a whole. The categories are:
Small Business of the Year
Export Business of the Year
Best Use of Technology
High Growth Business of the Year
Commitment to People Development
Education and Business Partnership
Excellence in Customer Service
Health and Wellbeing
Best Use of Social media
The deadline for entries is Friday 30 June 2017, the regional winners will be announced on 25 September 2017, with the national winners being announced on 30 November 2017 at a glittering awards ceremony in London. To enter online click here
Across all districts of Norfolk levels of unemployment fell. Overall, the claimant count for Norfolk stood at 8,475, which was a drop of 195 claimants from the previous month.
Broadland recorded the largest fall in claimant numbers with a drop of 5.9%. However King’s Lynn and West Norfolk only saw a small decrease of 0.6%. From a Great Yarmouth perspective, it continued a worrying trend from the previous month with a lack of a strong downward trend in claimant numbers. Their claimant count stands at 3,000.
Ordinarily it is expected that the Great Yarmouth claimant count falls drastically in the summer months, given the local job market’s seasonal pattern. Some on this anomaly can probably be assigned to the shift to full implementation of the Universal Credit, however a continuing trend would be a greater concern.
Commenting on the UK labour market statistics for June, released this week by the Office for National Statistics, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“With employment continuing to rise and unemployment falling, the UK jobs market remains on a firm footing.
“However, the strong headline figures mask some significant concerns. The gap between pay and price growth is now significant, and if inflation continues to rise as we expect, this could push UK growth materially lower by slowing household spending – a driver of UK economic growth. Employment levels may also moderate over the near term as the escalating burden of upfront business taxes and costs, and political uncertainty, dampen firms’ hiring intentions.
“The high number of vacancies is further evidence of the growing skills shortage. While employment levels are high by historic standards, businesses report that they are increasingly struggling to find staff with the right skills, which is constraining investment and productivity.
“The new government must make it a priority to tackle the UK’s chronic skills shortage, including easing the burden of upfront business costs to help firms recruit and train staff, and deliver a future immigration regime based on the needs of the UK economy.”
Virgin Media are expanding their Ultrafast digital network in Great Yarmouth. They are aiming to connect approximately 5,400 properties both residential and business from Fullers Hill, down to the sea front and South Denes. This will bring broadband speeds of up to 350Mbps for small/medium businesses and up to 300Mbps for residential customers along with their digital TV service.
Attending a recent meeting with Virgin Media, Neil Orford, President of Great Yarmouth Chamber Council said:
“The Great Yarmouth Chamber business community will welcome the opportunity to access superfast broadband, as this will help local businesses compete morecompetitvely at a global level.”
Virgin Media plan to start the works early July 2017 and complete in April 2018. Careful planning has been discussed with Norfolk County Council and Great Yarmouth Borough Council to ensure they do not disrupt the busy summer season and the majority of the work will be completed during the quieter Autumn and Winter months.
Commenting on the General Election result, Jonathan Cage, President of Norfolk Chamber said:
“After two long years of elections, referenda and wider uncertainty, many Norfolk businesses were doing their best to ignore the noise of politics – up until today.
“The electorate’s split decision generates further uncertainty for business communities, who are already grappling with currency fluctuations, rising costs, and the potential impacts of Brexit.
“The formation of a workable administration that can give voters and businesses confidence around economic management must be the immediate priority.
“Whilst Norfolk companies have for many months done their best to screen out political noise in order to focus on their own operations, this result will prove much harder for UK businesses to ignore. The swift formation of a functioning government is essential to business confidence and our wider economic prospects.
“Businesses are adept at forming alliances and coalitions when important interests are at stake. We should expect the same of our politicians.”
On the timetable for Brexit negotiations, which are scheduled to begin in less than a fortnight, Mr Cage said:
“No business would walk into a negotiation without clear objectives, an agreed starting position, and a strong negotiating team. It is hard to see how Brexit negotiations could begin without answers on these important questions.”
Norfolk Chamber has recently been talking to businesses about their future plans to better understand what factors are holding back their potential business growth. The Roundtables were free to attend and held in Great Yarmouth and King’s Lynn. Businesses will have a final chance to have their say at the last Roundtable which will be held in Norwich on Tuesday 11 July 2017.
So far over 40 businesses, of differing sizes and from a diverse range of sectors have attended the Roundtables to help pull together evidence for the updated New Anglia LEP Economic Strategy. Among the common themes in both areas were calls for better road and rail links, such as a fully dualled A47, and faster broadband. They also identified the need for parallel investment to be made in public transport to ensure sustainability of improved infrastructure.
Commenting on the need for improved infrastructure and a strong business input, Norfolk Chamber President, Jonathan Cage said:
“Previous infrastructure campaigns, such as the dualling of the A11 in Norfolk, were won by making clear the benefits to business. We can do a lot with joined-up marketing – that is in our power – however it is harder for us to say we are going to dual the A47. That’s where we need businesses to explain the difference it would make to them.”
Also highlighted as key priorities were improved skills and raising the aspirations of young people; the forging of stronger links between schools and employers; and engagement with students of a younger age.
The new Economic Strategy, will lay out the direction for the Norfolk and Suffolk economies through to 2036, highlighting where key strengths can be supported and where improvements are necessary. The finalised document is due for publication by New Anglia LEP in Autumn 2017.
Another business consideration that came from both Roundtables, was the need for a communication/PR strategy to ‘tell the story’ of Norfolk – to not only say, what a great place to live and work the county is, but to promote our strengths and show what opportunities are available.
Commenting on the Queen’s Speech, Chris Sargisson, Chief Executive of Norfolk Chamber said:
“Whilst Brexit isn’t the top immediate priority for many Norfolk businesses, firms of every size and shape want to avoid turbulence and confusion during the Brexit transition. The government’s proposed bills on trade, customs and immigration must minimise adjustment costs and maximise opportunities. Achieving this will require continuous and constructive engagement with business community in Norfolk and across the rest of the UK.
“Importantly, many of the real, practical priorities for businesses across Norfolk can be delivered without new primary legislation. Ministers must inject real momentum and pace into the major infrastructure schemes that have already been agreed and announced, such as the A47 improvement measures.
“They must cut back on the stifling up-front costs that deter investment and risk-taking, and press ahead with an Industrial Strategy that helps places across Norfolk to achieve their potential. This is an important moment for ministers to show that they are doing their day job, and delivering a stronger environment for growth here at home.
“Businesses across Norfolk want to see a workable government going about its day job, and clear signals that the economy is once again front and centre in political life. Consensus and a strong partnership between government and business will be critical at a time of significant change.”
On the Customs Bill:
“Norfolk Chamber of Commerce facilitate millions of pounds worth of UK trade across borders every year. We stand ready to work with the government to develop a UK customs system that supports free-flowing trade between UK firms and their customers and suppliers around the world. It is crucial that business and government work together, as well, to ensure that a new UK customs code underpins seamless trade between the UK and the continent in the years to come.”
On Immigration Bill:
“We want to see the needs of the Norfolk economy at the heart of this once-in-a-generation overhaul of the UK’s immigration system. While local businesses accept the need for controls over migration flows, they want clear assurances that they will be able to recruit from overseas to fill vacancies when they are unable to find or train suitable candidates here at home.
“After Brexit, they will also want to see a flexible system for the movement of labour and skills between the UK and the EU that enjoys clear public support. This is also a major opportunity to simplify the Home Office’s bureaucratic processes, which impose heavy costs and great uncertainty on businesses and individuals alike.”
On the Trade Bill:
“Safeguarding and retaining the favourable terms of trade that Norfolk businesses have enjoyed under EU free trade agreements negotiated by the EU over the past four decades must be a top priority for ministers as the UK develops its own trade policy. The firms we represent say that confirming existing levels of market access is a bigger immediate priority than launching new free trade negotiations with new countries and markets around the world. They also need ground-level trade promotion and support to take advantage of the opportunities that new trade agreements may create in future.”
On the Great Repeal Bill:
“At a time of change, Norfolk businesses want as much short-term certainty and stability as possible on their regulatory obligations. This bill must deliver continuity and the day-one equivalence that is necessary for businesses to continue to trade seamlessly with customers and suppliers, both in Europe and across the world.”
Last year, the Government announced the expansion of Heathrow Airport. An expanded Heathrow will double the airport’s cargo capacity and increase the number of domestic connections, boosting Britain’s exporters and ensuring every region and nation of the UK can get to global markets. With up to 40 more long haul destinations, the project will make Britain the best-connected country in the world.
Heathrow has committed to maximising opportunities for British businesses, including those in Norfolk, of all sizes who could benefit from being involved in the building one of the largest privately-funded infrastructure projects in Europe.
Interested parties should visit https://procurement.heathrow.com to register their interest and complete an Expression of Interest questionnaire before 31stJuly 2017. All applications will be considered by Heathrow and a list of potential sites is expected to be announced later this year.
Proposals are being discussed in the EU which, if adopted, would improve access for Ukrainian exporters to European markets.
EU ambassadors have reached agreement on the Council of Minister’s position on temporary autonomous trade measures in favour of Ukraine and have agreed that they should be adopted swiftly.
The new measures would apply for three years and comprise additional import quotas at zero tariff for certain agricultural products (tariff rate quotas at 0%), plus the partial or full removal of import duties on several industrial products.
By way of safeguard measures, Ukraine will be obliged to respect the same principles as under its existing association agreement with the EU, including respect for democratic principles, human rights and fundamental freedoms, and for the principle of the rule of law.
For their part, Members of the European Parliament (MEPs) have voted to ensure that tomatoes, wheat and urea do not enjoy further quota preferences than those outlined in the Deep and Comprehensive Free Trade Area (DCFTA) already in place with Ukraine.
MEPs also want to see the fight against corruption made a condition for granting Ukraine preferential exports, and have called for industry representatives, not just Member States, to be able to request a study on possible measures protecting EU producers.
The EU is Ukraine’s largest trading partner, with Ukrainian exports to the Member States totalling €12.7 billion in 2015. EU exports to Ukraine that year were valued at €13.9 billion.
MEP Jaroslaw Walesa said that, by granting additional temporary trade preferences, the European Parliament wants to support the ongoing reforms, strengthen small and medium-sized enterprises (SMEs) and provide the necessary impetus for increased trade flows.
“I hope that these measures will boost our relationship and effectively help Ukraine,” he added.
A summit between the two trading partners is scheduled on 12 July 2017.