Housing is the key focus of the first episode of this relaunched podcast series, discussing at length the government’s housing pledge, and why generations of governments have failed to build enough homes. Allan Williams and Mike Spicer also review events of the previous fortnight, from train timetables to inflation.
Whichever of the two options being considered by the Cabinet to replace the existing customs union with the EU is chosen, it will not be in place before Brexit happens, and one of them will cost businesses in the UK billions.
This possibility was explained to Members of Parliament’s (MPs) Treasury Committee by Jon Thompson, Chief Executive of HM Revenue & Customs (HMRC), the man charged with examining the practical problems of implementing the two systems.
The Prime Minister is said to favour a “customs partnership” under which the UK would collect tariffs set by the EU customs union on goods coming into the country.
Some members of the Cabinet, including particularly Foreign Secretary Boris Johnson, have backed what is known as the maximum facilitation (max fac) option, relying on technology and trusted trader arrangements to minimise customs checks at borders.
However, according to Mr Thompson’s calculations, firms would have to pay £32.50 for each customs declaration under the latter system – adding up to between £17 billion and £20 billion a year (more than the UK paid the EU in 2016).
The customs partnership model could end up being cost neutral but, according to Nicky Morgan, who chairs the Committee: “It will take three to five years to get new customs arrangements in place depending on which of the two options is chosen, but that can’t even start until a political decision has been made.”
Given that HMRC has more than 1000 staff working on Brexit at the moment, at a cost of £360 million, she asked Mr Thompson if it would be a relief if Parliament “just voted for a customs union”.
He said that was for MPs to decide.
Downing Street responded to his evidence to the Committee by saying: “The Prime Minister has asked for work to be done on both customs models. That work is ongoing and therefore any speculation about implementation is just that.”
The economic round robin debate at the Norfolk Chamber Planning & Development Group meeting last night highlighted that the development, planning and construction sectors are quiet at present.
The Group are looking at ways to boost growth in Norfolk and want to build upon the success of their National Planning Policy Framework debate with the local authorities in July and continue to keep the dialogue going with the local authorities and their planners. They also want to establish good relationships with the utility companies, the Highways Agency and the Environment Agency. Jonathan Cage, M.D. of Create Consulting Engineers and the chair of the Chamber Planning & Development Group said “We are keen to engage with these organisations to establish what their perceived barriers are to bringing forward growth and to work together to boost the economy and growth in Norfolk.”
Matt Wood from the Lucas Hickman Smith Group presented his ‘white paper’ on ‘Self-Build Norfolk’ to the Chamber Planning & Development Group. He highlighted the opportunities and benefits of self build homes. It was discussed that if more homes in Norfolk were self builds, this would also benefit local building contractors, suppliers and architects who were involved in these projects.
The Planning & Development Group also welcomed the news that £3.5m has been made available by Norfolk County Council for groups such as parish councils, voluntary groups and charities to apply for funding for community projects i.e. sports facilities, play areas etc.
The US announcement took the EU by surprise, as it was believed that exemptions previously agreed with the bloc – and also with Canada and Mexico – would be extended.
China was hit by exactly the same tariffs in March this year, but negotiations between the USA and the EU, Canada and Mexico were widely anticipated to result in the threat against them being dropped.
The Secretary of State for International Trade, Liam Fox, described the US move as “patently absurd” and said that the UK was prepared for a “tit-for-tat” response.
Speaking for the EU, Trade Commissioner Cecilia Malmström said that President Trump’s decision marked a bad day for world trade.
The Commission confirmed that it would open a dispute settlement case at the World Trade Organization (WTO) and would also impose “rebalancing measures” and take any necessary steps to protect the EU market from any trade diversion caused by the US action.
It has also drawn up a target list of 100 US goods worth €2.8 billion, which is reported to include Bourbon whiskey, Levi’s jeans and Harley-Davidson motorbikes.
However, commenting on the news for the CBI, Ben Digby warned that there would be no winners in a trade war, and that the tariffs could lead to a protectionist domino effect, damaging firms, employees and consumers in the USA, UK and many other trading partners.
“Now is not the time for a disproportionate escalation” he said, “and we urge the EU to consider this when initiating its response.”
For the British Chambers of Commerce (BCC), Dr Adam Marshall observed that, as the UK leaves the EU, the US decision to impose punitive tariffs is a helpful reminder that self-interest looms large in trade negotiations.
Ministers, he suggested, should reflect on this carefully before they pursue any future trade deal between the UK and the USA.
Recent revelations by HM Revenue & Customs (HMRC) about the possible cost of customs checks after Brexit (see It will cost you) have done little to settle business nerves about what lies ahead.
Nor will any export directors be feeling any more relaxed after leading accountancy firm RSM calculated that the additional costs arising from post-Brexit customs changes could be even higher than the £20 billion mentioned by the chief executive of HMRC to the Treasury Select Committee.
Brad Ashton, indirect tax partner at RSM, said: “Whilst HMRC has taken a rough median cost of £32.50 for a customs declaration, the actual cost is more likely closer to £40 – costs for similar customs declarations in the EU tend to be higher.”
He also highlighted that the lead time required for both solutions currently under consideration by the Cabinet would probably require an extension to the transition period, as they tend to rely on technology which is not yet in place or on co-operation with the EU that has not yet been agreed.
One of those alternatives – the so-called Max Fac option – has been totally dismissed by the manufacturers’ organisation, EEF, with the idea that it could be implemented by 2020 described as “naïve” and “wholly unrealistic”.
EEF Chief Executive Stephen Phipson has written to Business Secretary Greg Clark describing a recent visit during which he was able to see at first-hand how technology operates across the USA/Canada border.
Mr Phipson revealed that, despite a decade of substantial investment on both sides of the border by two willing partners, only 100 of the most trusted Canadian companies are able to use a “fast track” system across the border.
The vast majority of goods are, he warned, still subject to normal customs checks.
His comments were reinforced by Eurotunnel which has warned that UK businesses and consumers will face serious economic costs if the Government adopts either of the post-Brexit customs models being considered by the Cabinet.
Nothing can be done until the Government and the EU decide which system they want to use, Eurotunnel’s Director of Public Affairs John Keefe said, and it could then take several years to build the system, develop the necessary infrastructure, recruit and train new staff and educate transporters from across Europe in its use.
The economic round table discussion, at a recent meeting of the Norwich Chamber Council, highlighted that business are still finding it tough, with many business playing safe and being cautious. However there are some signs of improvement. Broom Boats advised that they have orders for two new hire boats for next year and will be re-launching their own hire boats. WLP also advised that some of their clients are becoming more optimistic, particularly those who have managed to adapt to the changeable economic conditions.
The group also heard about the proposed plans for the former RAF Coltishall from Mike Britch, Group Managing Director, NPS Property Consultants. Mr Britch highlighted that 400 acres of the 600 acre site would be returned to agricultural use. Some of the remaining 200 acres would be used for allotments, self build and community projects, whilst the rest would be for commercial use, which could include options for storage facilities, manufacturing etc. The heritage of the site would also be preserved and Mr Britch confirmed that once details had been finalised, business open days would be held to launch the site, possibly in October
We have a big mission over the next few years of ‘Connecting, supporting and giving voice to every Norfolk business’. We also want to double the number of members in the next five years and be relevant in all regions and towns across Norfolk.
Norfolk Chamber of Commerce needs to transform its culture and behaviour from siloed and administrative towards invigorated, multi skilled and totally customer centric by creating a Customer Experience team.
We are currently recruiting for the following roles.
We are looking for candidates to actively engage either by phone, email or at events with a wide range of business customers to understand and support their needs and then be motivated, inspired and driven to always exceed the customer’s expectations.
Members of the team will bridge and connect our customer across all our business disciplines (finance, international, policy and membership) and work within and environment of complete, transparency and customer care.
Norfolk Chamber is a not for profit business membership organisation with over 900 members. We provide networking opportunities, share knowledge, offer business services, signpost to business opportunities and inspire innovative thinking to enable companies to do better business.
To find out more information and to apply visit: https://www.norfolkchamber.co.uk/vacancies
Business leaders head from a series of expert speakers at Norfolk County Council’s ‘Brexit: Challenges and Opportunities’ event which was held at the Aviation Academy in Norwich today.
Expert speakers included: John Khan from Birketts, who outlined the impact of Brexit on VAT; Dr Avidan Kent, who gave an overview of commercial and trade law; Leszek Wysocki, for DIT, who provided an outline of the export opportunities and Mike Spicer, the Director of Research & Economics from the British Chambers of Commerce, who outlined the key aspects of the Chamber network’s Business Brexit Checklist.
Whilst the Government is still negotiation with the European Union, there is little in the way of detail available for businesses to work with. However the Chamber’s Business Brexit Checklist can help businesses consider the changes that Brexit may bring and will help with business planning at both operational and Board levels.
Commenting on the MPC minutes published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The decision to hold interest rates at 0.5% and to maintain QE at £375bn was taken unanimously, which was unsurprising. Existing QE is still being implemented, so it is understandable that the MPC wants to wait before another increase. However, the minutes reveal that some members think further stimulus will be needed, and the financial markets are expecting a QE increase around November time.
“Recent measures by the ECB, the US Fed and the Bank of Japan will probably reinforce pressures for an increase. But we still think the MPC should be cautious and refrain from adding to QE unless the UK financial system faces new threats due to developments in the eurozone. It is important that additional QE is not used to limit falls in inflation over the next year, as a temporary fall below the 2% target would support demand.
“Although QE was helpful in the early stages of the 2008/09 financial crisis, its benefits have diminished in recent years, mainly because the scheme has focused exclusively on purchasing gilts. A recovery in business lending will only be achieved if the MPC and the government relies on tools other than conventional QE. The Funding for Lending scheme could be effective, but the MPC could help by purchasing assets other than gilts, including securitised business loans. To ensure credit is reaching new and growing companies, the government should be moving towards the early creation of a state backed business bank.”
A firm is facing a fine of £10,000 after it failed to inform HM Revenue and Customs (HMRC) that it had changed its name – despite the fact that all it had done was change from a partnership to a limited company.
The unnamed firm had, according to the Forum of Private Business (FPB), an exemplary VAT-paying record and had always submitted its tax returns on time.
What is more, the change of name did not affect its VAT number and HMRC did not lose out on any tax payments. The firm simply failed to tell the VAT authorities that it now had “ltd” after its name.
This meant it fell foul of VAT notification liabilities contained in the Finance Act 1985, and later the VAT Act 1994, and landed the company with a £30,000 fine – since reduced following interventions by accountants and the FPB.
The Forum’s Tax Adviser Andrew Needham said: “It is important that all small businesses are aware they could face steep fines unless HMRC is kept fully updated.”
However, he went on, this heavy-handed approach is the very opposite of the support that is desperately needed at this difficult time and HMRC risks further alienating firms hit by its disproportionate, targeted business records checks regime and widely-reported poor levels of service.
– Public sector net borrowing was £14.4bn in August 2012, equal to the net borrowing in August 2011
Commenting on the public sector finance figures for August 2012, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The deficit in August was slightly smaller than the markets expected. But taking the entire period from April to August 2012 and removing the effect of one-off transactions, total borrowing so far this financial year was almost £13bn higher than in the same period in 2011. Unless present trends are reversed in the next few months, we now expect total borrowing in 2012/13 as a whole to exceed the total predicted by the OBR at the time of the Budget by more than £20bn. This situation is worrying, and is largely due to the continued stagnation in economic activity.
“To maintain credibility, the government should persevere with a realistic plan to reduce the deficit, but if persistently weak growth causes borrowing to overshoot, the UK’s credit rating may be endangered. Given these difficult circumstances, it is important to continue with spending cuts in areas such as welfare, pensions and the size of the civil service. These cuts should be supplemented with policies to boost growth such as more infrastructure spending, a reduction in NICs and support for business lending. Such measures will stimulate the productive potential of the economy and help businesses to create jobs.
“As long as the Chancellor can persuade the financial markets that he is determined to tackle the deficit, he should be able to preserve confidence and avoid threatening the UK’s credit rating.”
The International Trade Summit will give delegates practical advice, invaluable resources and the contacts needed to grow their business and begin the next step of their export journey.
Whatever stage of the export journey you are at, the BCC’s International Trade Summit is the event that will help you take your business to the next level.
There will be a choice of informative workshops, lively panel discussions with businesses with export experience from a range of sectors, stimulating speeches from policy makers, successful exporters and household names. And, of course, plenty of time for networking.
The themes for 2018 are: • Dealing with the practicalities of Brexit • The changing face of International Trade • Trading the world – be inspired!
This year’s International Trade Summit will take place at etc venues, Bishopsgate in London on 18th October.
This year we have received 20 complimentary tickets to the event for exporters or businesses looking to export. When booking your place, if you are a member of the Norfolk Chamber please use the code NOR18 to receive your complimentary ticket. These will be delivered on a first come first served basis. Once all 20 complimentary tickets have been claimed, the code will stop working. This offer expires on Monday 10th September 2018.
To find out more information about the International Trade Summit and to get your tickets, please visit https://www.bccexport.co.uk/