Business groups appeal to politicians to prevent ‘No Deal’

The UK’s five leading business groups, representing thousands of businesses across the UK employing millions of people, have united to call on politicians to prevent a disorderly ‘no-deal’ Brexit on 29 March.

“Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward. The lack of progress in Westminster means that the risk of a ‘no-deal’ Brexit is rising. Businesses of all sizes are reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money.

“Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay into stockpiling goods or materials, diverting cross border trade and moving offices, factories and therefore jobs and tax revenues out of the UK.  While many companies are actively preparing for a ‘no deal’ scenario, there are also hundreds of thousands who have yet to start – and cannot be expected to be ready in such a short space of time. All this activity stems from the growing risk of leaving the EU on 29 March without a deal.

“With just 100 days to go, the suggestion that ‘no-deal’ can be ‘managed’ is not a credible proposition. Businesses would face massive new customs costs and tariffs. Disruption at ports could destroy carefully built supply chains. From broadcasters, to insurance brokers, to our financial services – the UK’s world-leading services sector will be needlessly disadvantaged, and many professional qualifications will be unrecognised across the EU. UK and EU nationals working abroad will be left in deep uncertainty about their future.

“As a result of the lack of progress, the Government is understandably now in a place where it must step up no-deal planning, but it is clear there is simply not enough time to prevent severe dislocation and disruption in just 100 days.  This is not where we should be.  The responsibility to find a way forward now rests directly with 650 MPs in Parliament.

“Nobody wants to prolong the uncertainty, but everyone must remember that businesses and communities need time to adapt to future changes. As the UK’s leading business groups, we are asking MPs from all parties to return to their constituencies over Christmas and talk to their local business communities. We hope that they will listen and remember that when they return to Parliament, the future course of our economy will be in their hands.”

Dr Adam Marshall, Director General, British Chambers of Commerce

Carolyn Fairbairn, Director General, Confederation of British Industry

Stephen Phipson CBE, Chief Executive, EEF, the manufacturers’ organisation

Mike Cherry OBE, National Chairman, Federation of Small Businesses

Stephen Martin, Director General, Institute of Directors

ENDS

Outlook weakens for business investment

Uncertainty over the UK’s future relationship with the EU is one factors that has weakened the outlook for business investment, says the British Chambers of Commerce (BCC).

A decline of -0.6% for business investment in 2018 is expected to be followed next year with growth of just 0.1%.  The figures coincide with the repeated delays and lack of clarity on Brexit and future trading arrangements.  Many firms have hit pause on investment plans.

The BCC forecast assumes that the UK will reach an agreement in negotiations with the EU, and avoid a cliff edge in the short term. Longer-term prospects are still uncertain, but this forecast assumes that a trade deal is reached, at least at outline level. Other scenarios would lead to revisions in the next forecast.

Adam Marshall, Director- General, BCC

UK GDP growth is expected to slow to just 0.1% in the final quarter of 2018. The BCC’s forecast for 2019 GDP growth remains at 1.3% but has downgraded its 2020 GDP forecast to 1.5% (from 1.6%).  The slide in the value of the pound together with weaker confidence levels is expected to stifle the contribution of net trade and consumer spending to UK GDP growth. Inflation is now expected to be higher over the forecast period as the weakness in sterling pushes up the cost of imports.

BCC is urging Westminster to come together to provide clarity on the UK’s future relationship with the EU, and avoid a disorderly Brexit.

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“The contribution of business investment to UK GDP growth is expected to be more downbeat than we previously projected as the increased uncertainty over Brexit weakens business confidence and stifles investment activity.  Consumer spending is expected to be more limited as the weaker pound drives higher imported inflation over the near term, stifling real wage growth. A weakening currency is also expected to hinder, rather than help the UK’s net trade position by increasing imported input costs while a slowing global economy will limit export demand.”

Key findings in the forecast:

  • 2018 GDP growth forecast marginally upgraded from 1.1% to 1.2%. UK GDP growth is expected to slow to 0.1% in Q4 2018 (down from 0.6% in the previous quarter). 2019 GDP stays at 1.3%, while 2020 is downgraded, from 1.6% to 1.5%
  • Business investment to contract in 2018 by 0.6% (down from 1.0%), before growing by just 0.1% in 2019, and 1.2% in 2020
  • Household consumption to grow at 1.5% in 2018, 1.2% in 2019 and 1.5% in 2020, compared to 1% in 2018, 1.3% in 2019, and 1.7% in the previous forecast.
  • Average earnings growth to outstrip inflation but by less than the previous forecast, with growth of 2.6%, 2.7%, and 2.9%, compared with CPI inflation of 2.5%, 2.4%, and 2.2%
  • BCC forecasts export growth of 1.4% in 2018, 2.3% in 2019, and 2.2% in 2020, down 1.7%, 2.7% and 2.9% respectively in our previous forecast
  • We anticipate interest rates rising to 1.25% by the end of the forecast period, with rate rises expected in Q4 2019 and Q4 2020

Chamber head recognised with doctorate

Sandy Needham, Chief Executive of West & North Yorkshire Chamber of Commerce, was awarded an Honorary Doctorate from Bradford University’s Faculty of Management, Law & Social Sciences on Wednesday 5 December 2018.  Sandy was recognised for her contributions to business and enterprise, aswell as for having a pioneering attitude and commitment to collaboration.

Since her initial involvement with the Chamber in 1997, Sandy has helped spear-head several business support and economic development initiatives, and in 2014 managed the merger of Bradford, Leeds and York & North Yorkshire Chambers.  The recommendation for the award came from the university’s Dr Crina Oltean-Dumbrava, a steering group member of Bradford Chamber’s Property Forum.  Sandy also has close ties to higher education:  she was previously a member of the University Council, chairing the Audit Committee and the Yorkshire Innovation Fund; she is currently a member of the University Court.

The merger of the three Chambers of Commerce covering Bradford, Leeds and York & North Yorkshire has subsequently created one of the largest business support organisations in the country.  Sandy’s other non-executive roles include:

  • director of Leeds Business Improvement District
  • member of the Business Innovation & Growth Panel of Leeds City Region Enterprise Partnership
  • British Chambers of Commerce Board Director
  • Member of Bradford Economic Partnership,
  • Bradford City of Film Board member
  • Deputy Chair of Bradford Business Improvement District.

Sandy said of the award:

“I’m very flattered and humbled to be honoured in this way.  I’d like to think that my contribution to the business community and economic success more generally is making a difference to our region’s prosperity, although I am just one of a bigger team of people with the same objectives in mind.”

Sandy was one of five high profile figures to be recognised at the graduation ceremony – the others were University College London’s Nicholas Barber, Welcome to Yorkshire’s Sir Gary Verity, social services professional Jonathan Phillips and local academic Dr Hassib Sahyoun.

Initiatives that Sandy has helped oversee during her time with the Chamber include:

  • Providing industrial units and offices on easy terms for start-ups
  • Creating the ‘Raising the Bar’ project to recognise businesses’ support of the wider community
  • Establishing a company to loan funds for businesses unable to borrow from high street lenders.