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The BCC is calling on the Chancellor to use his Spring Budget to relieve cost and recruitment pressures on business. It follows the release of new research which reveals the struggles firms face at the start of 2023.
Among the findings from the survey, of more than 1,000 companies, are:
The survey backs up findings from the BCC’s most recent Quarterly Economic Survey of more than 5,000 companies which found business confidence remains at Covid-crisis levels.
It found that only one in three (34%) businesses believed their profits will increase over the coming year, and more (36%) expected a decline. While a quarter of firms reported a decrease in sales in the last quarter of 2022, with hospitality firms the least likely to report improvements.
Commenting on the findings, Shevaun Haviland, Director General of the BCC, said:
“This snapshot of the state of play for business at the start of 2023 sets out exactly why the Chancellor must act in his budget to fuel investment in the UK.
“We know we have a tough year ahead. With costs piling up on their doorsteps and so much uncertainty on Government policies, there is currently little incentive for firms to risk either their dwindling cash reserves or fresh loans on new projects.
“Firms know that the UK’s finances are tight, but the Chancellor needs to show more faith in the ability and talent of our businesses.
“If they can see the Government is prepared to back them, by taking action on childcare, energy costs, green funding and investment, then the future could soon look a lot rosier and greener.”
The BCC has set out four key areas where the Chancellor must act in the budget if businesses are to make headway in bolstering the economy in 2023.
These are:
• Unlocking talent and easing pressure in the labour market by making childcare more affordable for cash-strapped parents and guardians
• Boosting the UK’s start-ups by further reforming the business rates system to remove the upfront financial squeeze they face
• Setting a framework for Solvency II investment that helps direct funds to where they can have the most impact, leveraging the opportunities of green innovation
• Funding to help businesses become greener and more energy efficient
The BCC’s four non-negotiables form part of its wider budget submission to the Treasury. It contains a list of 24 recommendations for the Chancellor that could create the conditions businesses need to power the UK’s economic recovery.
With more than 160 years of experience in the world of trade we know that once you open the door to overseas exports then the possibilities for expansion are endless. That’s why we want to build a business community in the United Kingdom where more than half of firms export. Our Chamber Network already does that, and we want to help thousands more do it too. That is why we have published a new Trade Manifesto.
New figures coincide with Business and Trade Secretary’s visit to Mexico, where she is progressing a modernised UK-Mexico deal and promoting the UK’s accession to CPTPP.
Business and Trade Secretary Kemi Badenoch has welcomed new figures showing UK services exports reached record highs, adding that they ‘cement the UK’s position as a global services superpower’.
The trade data released by the Office for National Statistics today (Friday 10th February) shows that UK services exports reached record highs in 2022, totalling £397 billion.
In current prices, it means an increase of 20% compared to 2021, and up 23% on exports in 2018.
The UK is the second biggest services exporter in the world – behind only the US, and the services sector contributes around 80% of the UK’s GDP. Today’s results show the UK is contributing to a growing global sector, with service sectors across the world expected to account for 28% of global trade by 2030 – up from 25% in 2019.
The Business and Trade Secretary welcomed the news on day two of her visit to Mexico, where she is using high level talks with Mexican cabinet counterparts to secure benefits for thousands of UK firms by locking in expansive services provisions as part of a new, modern UK-Mexico trade deal.
Alongside an upgraded bilateral deal, the Business and Trade Secretary is in Mexico to promote the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Mexico is a member.
Joining CPTPP will secure enhanced market access, predictability, and transparency for UK service suppliers who exported £30bn worth of services to CPTPP countries in 2021. Modern trade agreements like CPTPP, that set ambitious rules for trade in services between members, are vital for UK companies looking to maximise opportunities to grow their businesses across both sides of the Pacific.
Business and Trade Secretary Kemi Badenoch said:
These new figures are a trade success story and cement the UK’s position as a global services superpower.
Services are the lifeblood of our economy, employing over 8 in 10 of our workforce. To see services trade reaching these heights is a firm reminder of the resilience of our strong services economy and shows significant progress in our race to export over a trillion pounds of British goods and services a year by 2030.
I’ll be using my talks with Mexican politicians and UK businesses operating in Mexico to make the case for a revamped UK-Mexico trade deal which will significantly increase export opportunities, and boost jobs around the UK.
Latest figures show the UK exports over £1bn worth of services to Mexico, a 30% increase in current prices on the previous year. A more modern, forward looking ‘Mexico 2.0’ deal could boost this even further, unlocking export opportunities for SMEs and the UK’s digital and services industries.
UK businesses who would benefit from modernised services rules between both countries range from British bank HSBC, currently the fifth largest bank in Mexico, to Pearson Education, whose products and services include world-renowned academic qualifications, digital content, assessments and data.
Notes to editors:
Several sectors have contributed to today’s figures, including travel and professional business services, which include professional and management consulting services such as legal, architectural and research and development services. With 62% of UK professional business services jobs and 59% of businesses located outside of London and the South East, the services sector has maintained its position as a key contributor to Levelling Up and to future regional economic development.
References
Commenting on the Government’s overhaul of the UK’s audit regime, Suren Thiru, Head of Economics at the BCC, said:
“The focus on making improvements to the audit industry is a positive step, particularly with the issues raised after a number of high-profile company collapses. However, government and regulators must tread carefully to avoid unintended consequences, including adding to the already onerous cost burden on firms and undermining the UK’s global reputation as great place to do business.”
Genral info on the Covid-19 situation and the support for business and employees in UK.
Great overview of the different relief packages and how, as a business professsional, to obtain them.
General information from the Danish Authorities
More in-depth health information on Covid-19, with a good FAQ.
As the month of February drew to a close, we welcomed Danish Minister for Industry, Business and Financial Affairs Brian Mikkelsen to speak at an Executive Breakfast Brief. The event was hosted by our members NJORD Law Firm at their premises in the centre of Copenhagen, which provided a fantastic setting for the speech from the Minister.
Photos (L-R): NJORD Law Firm’s Partner Ulrik Fleischer welcoming guests and Brian Mikkelsen addressing the audience
The audience contained representatives from a range of British Chamber members, and H.E the British Ambassador to Denmark was also present. Brian Mikkelsen spoke about why the UK is one of Denmark’s most important trading partners, emphasizing historical and cultural ties which are so important to the close relations. He shared personal stories and his own feelings about political trends of recent years.
He also highlighted various initiatives which the Danish Government are rolling out, referring to the Green Economy, Digital Transformation and Disruption in particular. The event also provided executives from British Chamber members with the opportunity to put their questions to the Minister following the end of his speech. Mr Mikkelsen handled questions from the floor on a range of issues, before having to excuse himself due to an appointment with the Danish Queen.
On Friday the 14th of June, not only is it the Hard Rock Cafe’s birthday, marking 48 years Rockin’ Worldwide, but they are throwing a Legendary party to celebrate the launch of a new menu.
The new menu features Boozy Milkshakes, Steak Burgers and various vegetarian options.
This is an Open House event, so you are welcome to come by at any time.
The Hard Rock vibe will be settled with Live Music from 16:00 until 23:00.
There will be special discounted prices on a range of drinks from the bar, as well as food from the menu. For more details, see here.
We are delighted to announce that Citelum has become the latest member of the British Chamber of Commerce in Denmark. Citelum is a global organisation that is not only dedicated to managing and renewing public lighting in towns and cities, but takes a leading role in the development of Smart Cities. As a subsidiary of the EDF Group, the company is active in 14 countries, employing around 2,600 people, based mainly in Europe and North and South America.
In June 2017 we had the pleasure of hosting Citelum Denmark’s CEO Matthew Nunn to speak at our conference, titled “The Age of Sustainable Innovation”. The conference explored how businesses can leverage the UN Sustainable Development Goals to support innovation and growth. Mr Nunn participated in a panel debate on aligning the goals of businesses, consumers and regulators.
Welcome to BCCD, to Matthew and Citelum, we look forward to working with you.
We are proud to announce that Gorrissen Federspiel has become the latest member of the British Chamber of Commerce in Denmark. Gorrissen Federspiel is a leading Danish law firm with a strong international footprint.
In June 2017 we had the pleasure of hosting Citelum Denmark’s CEO Matthew Nunn to speak at our conference, titled “The Age of Sustainable Innovation”. The conference explored how businesses can leverage the UN Sustainable Development Goals to support innovation and growth. Mr Nunn participated in a panel debate on aligning the goals of businesses, consumers and regulators.
Welcome to BCCD, to Matthew and Citelum, we look forward to working with you.
St George’s Dinner
The Royal Society of St George – Denmark Branch
Patron: The Queen
St George’s Dinner: Saturday 23rd April 2016
The Royal Society of St George established a branch in Denmark during 2014, with the inauguration certificate being issued on the 1st of November 2014. The Society was originally founded in England in 1894. Our first Royal Patron was Queen Victoria, and all Monarchs since have been Patron to the Society. Her Majesty Queen Elizabeth the Second bestowed the notable honour by granting the Society its own Royal Charter in 1963. We are a non-profit, non-political and non-religious organisation, though we do recognise very much the fact that The Queen is our patron. The society invites people of all walks of life to join us, to further promote Englishness and our culture in a social and fun manner. But we also seriously remember from time to time those who are no longer able to be with us, and who fought for our freedoms.
The first major function and event hosted by the Society here in Denmark was the St George’s dinner, held on St George’s Day (also considered the English National Day) and included a full English gala dinner at the Peter Liep’s Hus in Dyrehaven. The dinner was to celebrate St George’s day, but also The Queen’s 90th Birthday, 400 years since the passing of Shakespeare and (in just a few months) the first centenary of the Battle of Jutland. The evening commenced with a march in of the Helsingor Girl Band and a reception drink of Kir Royal before processing through for dinner. Not only were we provided with a superb roast beef dinner – we enjoyed fantastic Yorkshire puddings. A Yorkshire pudding is in fact savoury, and goes so deliciously with thick flavoursome gravy! The starter was a wild boar terrine; English Stilton cheese and Cheddar was served after dinner; the desert was a chocolate fondant. Sixty two guests attended, with the Guest of Honour being the Canadian Ambassador Andre Francois Giroux and his wife Nathalie. I understand that they had only had Yorkshire puddings once previously – which were not as good as the ones at this dinner. As the Ambassador commented, the evening passed off in such a typically British fashion!
The evening also saw Benni Chawes provide two slots of musical entertainment, with a taster of his musical talent and brilliance. During the evening both National Anthems were played, including toasts to both our Majesties. Land of Hope and Glory was sung with much gusto and merriment towards the end of the evening!
Several companies helped in sponsoring and supporting our event, for which we are ever grateful, and the British Chamber of Commerce in Denmark was instrumental in introducing the Society to many of the supporters. Without all of their support such events are impossible to perform, and this helps to fly the flag in a social and festive way. A raffle (Danes know this as a lottery) was held, raising over DKK 6,500/- for the Children’s Cancer Foundation here in Denmark. We will be holding this dinner annually and look forward to next year!
Should anyone wish to join the Society, please feel free to contact the President on:rsgdenmark@gmail.com
BCCD Golf Tournament 2014
On Wednesday 3rd September 2014, the British Chamber of Commerce in Denmark held its annual Golf Event.
With around 45 participants, both experienced Handicapped Players and Beginners, the event was held at the wonderful Ledreborg Palace Golf Course close to Roskilde. This course, designed by Sir Nick Faldo, provided a challenging but enjoyable golfing experience for players of all handicaps. The Ledreborg course, set in stunning nature is augmented by the tremendous facilities of a modern club house with top of the range facilities for golfers and beginners alike.
Our day began with a welcome from Mariano Davies, BCCD’s President and Peter Bjulf Gindrup, Golf Manager, who outlined the format for the day and wished all players the best of luck on this championship course. During his introduction, Mariano thanked our main Sponsor, BMW for their generous sponsorship of 1 week access to a new BMW 4 series Grand Coupé for the first player to achieve a “Hole in One” on hole 17.
After a short practice session, the teams set off on a 5 hours trip of intensive golf. In parallel the beginners started off with expert coaching and set off on to the practice range followed by their own tournament on Ledreborg’s Par 3 course. This was followed by an interesting tour of Ledreborg Palace.
At the end of both tournaments the teams regrouped at the Club House for lunch and the award of prizes. Sadly, no one achieve the “hole in one”.
However, in total 8 prizes where won on the day:
Best Individual Player; Ulrik Fleischer-Michaelsen, Partner Bird & Bird
Runner up: Peter Stakemann, Attorney at Law, Stakemann
Winner Womens Competetion: Sharon Garde-Due, Partner, Your Danish Life Magazine
Winner Beginners Tournament: Arne Riis, Partner, Bech-Bruun
Longest Drive: Niels Agger-Nielsen, Vida Byg
The rest of our sponsored prizes were handed out in a scorecard surprise lottery. We are extremely grateful to all who sponsored our prizes:
· 71% of exporters say EU trade deal is not enabling them to grow or increase sales
· Only 1 in 8 exporters think it is helping them grow or increase sales
· Majority think it has pushed up costs, increased paperwork and delays, and put the UK at a competitive disadvantage.
New research* carried out by the British Chambers of Commerce of more than 1,000 businesses has highlighted a host of issues with the UK’s trade deal with Europe. The BCC believes urgent steps should be taken to address these problems so the UK Government’s ambition to increase the number of firms exporting can be met.
Overall, just 8% of firms agreed that the Trade and Co-operation Agreement (TCA) was ‘enabling their business to grow or increase sales’, while 54% disagreed. For UK exporters 12% agreed that the TCA was helping them while 71% disagreed.
When asked to comment on the specific advantage (for those that agreed) or disadvantage (for those that disagreed) of the trade deal, 59 firms identified an advantage, while 320 cited a disadvantage.
Of the 59 comments received on the advantage of the TCA, firms said:
· It had allowed some companies to continue to trade without significant change
· It had encouraged firms to look at other global markets
· It had provided stability to allow firms to plan.
Of the 320 comments received on the disadvantage of the TCA, firms said:
· It had led to rising costs for companies and their clients
· Smaller businesses did not have the time and money to deal with the bureaucracy it had introduced
· It had put off EU customers from considering UK goods and services – due to the perceived costs and complexities.
This follows BCC research in October 2021, which found that 60% of exporters were facing difficulties adapting to the changes from the TCA on goods trade, while 17% found the changes easy.
Reacting to the findings, William Bain, Head of Trade Policy at the BCC, said:
“This is the latest BCC research to clearly show there are issues with the EU trade deal that need to be improved. Yet it could be so different. There are five relatively simple steps that UK and EU policymakers could take to ease the burden placed on businesses struggling with the trade deal.
“Nearly all of the businesses in this research have fewer than 250 employees and these smaller firms are feeling most of the pain of the new burdens in the TCA.
“Many of these companies have neither the time, staff or money to deal with the additional paperwork and rising costs involved with EU trade, nor can they afford to set up a new base in Europe or pay for intermediaries to represent them.
“But if both sides take a pragmatic approach, they could reach a new understanding on the rules and then build on that further.
“Accredited Chambers of Commerce support the UK Government’s ambition to massively increase the number of firms exporting. If we can free up the flow of goods and services into the EU, our largest overseas market, it will go a long way to realising that goal.”
The BCC’s five key issues, and the solutions needed, to improve EU trade are:
ISSUE: Export health certificates cost too much and take up too much time for smaller food exporters.
SOLUTION: We need a supplementary deal on this which either eliminates or reduces the complexity of exporting food for these firms.
ISSUE: Some companies are being asked to register in multiple EU states for VAT in order to sell online to customers there.
SOLUTION: We need a supplementary deal, like Norway’s with the EU. This exempts the smallest firms from the requirement to have a fiscal representative and incur these duplicate costs.
ISSUE: As things stand CE marked industrial and electrical products will not be permitted for sale on the market in Great Britain from January 2023. The same is true for components and spares.
SOLUTION: We need action from the Government to help businesses with these timelines. Many firms are far from convinced about a ban on CE marked goods in Great Britain.
ISSUE: UK firms facing limitations on business travel and work activities in the EU.
SOLUTION: Government needs to make side deals with the EU and member states to boost access in this area as a priority for 2022.
ISSUE: Companies starting to be pursued in respect of import customs declarations deferred from last year.
SOLUTION: We need a pragmatic approach to enforcement to ensure companies recovering from the pandemic do not face heavy-handed demands too quickly on import payments, or paperwork.
BCC Brexit survey: Half of UK exporters report difficulties adapting to changes relating to EU-UK goods trade
Results from the first major business survey for 2021 by the British Chambers of Commerce on Brexit found that half (49%) of exporters are facing difficulties in adapting to the changes in the trade of goods following the ratification of the UK-EU Trade and Cooperation Agreement (TCA) on 1 January 2021.
The survey
Fieldwork for the survey, which received 1,000 responses, mainly from SMEs, was carried out between 18 and 31 January 2021. Nearly half (47%) of respondents exported goods or services.
The survey sought to understand the extent to which businesses found it easy or difficult to adapt to changes in trading goods and/or services and moving people in the month since the ratification of the TCA. Businesses reported the highest proportion of difficulties in adapting to changes in trading goods.
The survey found that:
· overall, around a third of respondents (30%) reported difficulties adapting to changes to moving or trading goods in the first month of the year, while 10% said they had found adapting to the changes easy. 45% said trade in goods was not applicable to their business, and 16% said it was too early to say;
· however, the percentage facing difficulties in adapting to changes in trading goods rose for exporters, where half (49%) reported issues, as well as manufacturers, where the percentage facing difficulties was more than half (51%);
· overall, 14% of firms said that they faced difficulties in adapting to changes in the trade of services. 10% said they had found adapting to the changes easy. The percentage facing difficulties rose for exporters, where 21% reported issues.
When asked about the specific difficulties businesses were facing, commonly cited concerns included increased administration, costs, delays, and confusion about what rules to follow.
Need for Action
The BCC will continue to support UK businesses through its trade documentation services and Chamber Customs, a customs advisory, training and brokerage service delivered through Chambers of Commerce across the UK, and by working closely with the government.
The leading business group is calling on the UK Government, and where necessary with EU partners, to:
· work with us and the Chamber network to identify the most significant blockages for business and immediately publish plans for resolving those problems;
· create tax credits allowing firms to offset their spending on adaptation to the new UK-EU requirements against their tax bill, helping businesses navigate new burdens and requirements better;
· push back the imposition of additional SPS checks (from April) and full customs checks (from July) on imports into the UK. Sanitary and Phytosanitary (‘SPS’) checks are scientific tests on animal and plant goods; and
· look at key areas of the new relationship and work with EU partners on easements to minimise unhelpful burdens, including on aspects of Rules of Origin and VAT.
Commenting on the results, BCC Director General Adam Marshall said:
“Trading businesses – and the UK’s chances at a strong economic recovery – are being hit hard by changes at the border.
“The late agreement of a UK-EU trade deal left businesses in the dark on the detail right until the last minute, so it’s unsurprising to see that so many businesses are now experiencing practical difficulties on the ground as the new arrangements go live.
“For some firms these concerns are existential, and go well beyond mere ‘teething problems’. It should not be the case that companies simply have to give up on selling their goods and services into the EU. Ministers must do everything they can to fix the problems that are within the UK’s own control, and increase their outreach to EU counterparts to solve the knotty issues that are stifling trade in both directions.
“This situation could get worse if the UK sticks to its guns and introduces additional SPS checks in April and full customs checks on imports in July. These timescales need to change – and the support available for businesses who are battling to adapt to new trading conditions significantly increased.”
Commenting on what this means for businesses on the ground, BCC Director of Trade Facilitation and ChamberCustoms Liam Smyth said:
“Underneath the overall figures, firms’ concerns fit broadly into three areas.
“First, difficulties arising from the challenges adjusting to the new arrangements, such as the sheer volume of paperwork and significant new costs of adjusting to those.
“Second, issues about how new rules have been implemented, such as new customs arrangements.
“Third, core provisions of the TCA which are currently of significant concern to businesses, such as on Rules of Origin and VAT.
“Taken together, and on top of decreased revenue and cash flow as a result of the pandemic, this is a difficult moment for exporters. Some tell us they will respond to the challenges by switching away from international trade or by moving their operations overseas.
“The Government needs to respond to this risk by giving firms tax credits to help with their ongoing adjustment and leaving no stone unturned in educating businesses and removing every barrier they can.”
Specific issues raised by businesses in the survey
Chris Black, Managing Director of Sound Leisure, a UK manufacturing firm based in Yorkshire, highlighted some of the difficulties that businesses across the UK are facing trading across borders post-Brexit:
“As a business that exports 65 – 75% of everything that we manufacture and the EU being a big part of that, we are concerned about tariffs, additional paperwork, and delays at the borders.
“Only last week we attempted to ship some machines to Spain and were advised by the freight forwarder to store the machine here for a few more weeks whilst everything calmed down. There is a long way to go before we fully understand what the new normal is.
“We are in the perfect storm following the pandemic, where supply chains were hit hard, container ships are all out of position – in general shipping worldwide is a nightmare.”
Jonathan Kemp, Managing Director of a manufacturing company AEV Group Limited, based in Merseyside with a plant in Hungary, said:
“We export to every continent in the world and have done for a period of time, therefore we have employees who are experienced in dealing with exports. The issue with the EU-UK situation is the lack of clarity and preparedness in all areas.
“There is no support from government to fund delays or extra stock-holding required to deal with the delays or to assist in extra charges incurred by us or our customers. We have another manufacturing site in Hungary (within the EU) and we are being asked by European customers to move production to this site because they don’t want any extra paperwork or costs (even if just cashflow from paying VAT). Our current view is that we will reduce our operation in the UK and invest in EU facilities.”
The increase in paperwork to fill in was an issue for Shropshire Chamber of Commerce member and kitchenware company, Netherton Foundry:
“Increased documentation [means that we] need to use higher paid staff to complete shipping details. Loss of orders due to new duty/customs arrangements; time (and therefore money) spent resolving European customers enquiries; cost of implementing new shipping arrangements and delivery charges on our website. A small business like ours does not have the resources to deal with all the extra work.”
For print version click here
British Chambers of Commerce responds to Chancellor’s Winter Economic Plan
Find the Chancellor’s Winter plan here
Responding to The Chancellor of the Exchequer Rishi Sunak MP’s announcement of a Winter Economic Plan, including a new raft of measures to support businesses and the economy as the pandemic continues, BCC Director General Adam Marshall said:
“The measures announced by the Chancellor will give business and the economy an important shot in the arm. Chambers of Commerce have consistently called for a new generation of support to help protect livelihoods and ease the cash pressures faced by firms as they head into a challenging and uncertain winter.
“The Chancellor has responded to our concerns with substantial steps that will help companies preserve jobs and navigate through the coming months. The new Jobs Support Scheme will help many companies hold on to valued, skilled employees. Businesses will be eager to see the detail and consider whether and how they will be able to use the scheme.
“The Chancellor has listened to our consistent calls for an extension of business lending schemes, more flexible repayment terms for loans, and tax forbearance measures. With almost 40% of our firms saying they have 3 months cash in reserve or less, this will lessen the immediate pressure and provide reassurance for many affected firms at a challenging time.
“The Chancellor must remain open to taking additional action to support parts of the economy facing unprecedented challenges over the months ahead. Chambers of Commerce across the UK will continue to work with government to ensure the benefits of these schemes are delivered to firms on the ground.”
Responding to the news that phase 2 of the roadmap out of lockdown for England will go ahead in April, Claire Walker, Co-Executive Director of the BCC, said:
“This is great news. Many firms will be breathing a huge sigh of relief that they will soon be able to reopen their doors to customers. The last year has taken a heavy toll on firms across the country and they will be counting down the hours until they can begin trading and rebuilding their businesses.
“However, the route back to a full reopening of the economy is still a long way off, with continued uncertainty for some sectors about whether, and when, the next roadmap steps will be met, and many more firms asking questions, yet to be answered, about when they can open at full capacity or with fewer restrictions.
“The latest BCC Quarterly Economic Survey has shown that businesses are becoming more optimistic about the future. But that confidence is fragile and absolute clarity and honesty will be needed every step of the way over the weeks ahead, so that companies have a fighting chance to rebuild.
“To translate hope of renewal into reality there must be a coherent strategy for growth which empowers and enables businesses to lead the economic recovery from Covid-19. Firms will need time to get back on their feet, with the security of knowing Government will support them should the roadmap falter.”
Commenting on International Travel, Walker, said:
“The sectors which rely on international travel and their supply chains have been hit extremely hard over the last year and have faced one of the longest periods of uncertainty about when they would be able to resume normal operations.
“It is absolutely vital that the Global Travel Taskforce provides certainty as soon as possible about what level of restrictions will apply on travel to, and from, specific countries in advance of the proposed resumption of international travel on May 17.”
On proposals for time-limited Covid status certification, Walker said:
“The government should waste no time in setting out concrete proposals for how Covid certification could work and the rationale behind the inclusion of some sectors and not others. With businesses already investing significant time and money into their reopening plans, they have considerable questions around the implications of such a scheme, including the practical implementation for firms and issues of employment law and liability. The Government must be crystal clear on these issues and consult with business on how any system might function.”
Commenting on plans to allow everyone to access twice weekly lateral flow tests, Walker said:
“We very much welcome the plan to make lateral flow testing available to every adult in England twice a week. Alongside the workplace testing strategy, this will buoy business confidence as companies start to plan for reopening and rebuilding the economy. But it is also crucial that Government makes sure that people who need to self-isolate are fully supported.”
The BCC is urging the government to give businesses much greater clarity on its roadmap out of lockdown as firms continue to suffer.
The business organisation, which represents tens of thousands of companies of all shapes and sizes across the UK, has written to the government seeking updates on a number of vital issues.
In particular, it says firms need to know how the government is assessing its four tests to determine if the roadmap will be followed. This includes providing regular updates on progress against the tests so that businesses can plan ahead.
Firms also need more detail on the practicalities of reopening and the government’s various reviews so they can make concrete plans on how they will operate – for example, what social distancing rules will be in place at each stage of the roadmap and beyond.
Companies are also looking to government for clarity on potential legal issues surrounding vaccinations.
Finally, businesses which operate across the UK need the government and devolved administrations to work together on synchronising their differing routes out of lockdown.
It follows a BCC survey of more than 1,000 firms at the end of January which revealed that many firms were struggling due to the continued COVID restrictions:
Of the firms reporting write offs, the mean average approximate financial value of these write offs was just over £61k, while the median average was £5k.
Of the 527 micro firms (businesses with less than 10 employees or sole traders) that responded to this question, 34 per cent of respondents said they saw write offs relating to Covid-19 lockdowns or restrictions in the last twelve months. The mean average approximate financial value of these write offs was £28.5k.
Commenting on the lack of roadmap clarity, Baroness Ruby McGregor-Smith, President of the BCC, said:
“The route back to a full reopening of the economy is still a long way off, with continued uncertainty about whether, and when, the roadmap steps will be met.
“Far too little has been revealed about how the Government is assessing its four tests on the roadmap for businesses to accurately judge whether it will happen as planned.
“The timescales for some firms to get ready are already short. Others will be holding out for decisions to be made around issues like international travel and tourism to finally give them hope for the future.
“The UK Government must also find a way to work much more closely with the devolved administrations in Wales, Scotland and Northern Ireland on a collective route out of lockdown. Many businesses operate across these borders, in both directions, which makes planning their restart even more complex.
“Many companies appear reluctant to invest, buy in new stock or make plans for how they will operate when so much is still unknown. They have built up huge levels of debt throughout a year of continued restrictions, seen their cashflow reduced to a trickle in some sectors, while others have been forced to absorb large write-offs due to sudden lockdowns.”
The Viewpoint of Businesses
Andrew Coggings, Managing Director of Goodwood Estate in West Sussex, said:
“For all three lockdowns, all food and beverage outlets across the Goodwood Estate have had to write off substantial amounts of drink.
“The most recent lockdown cost us far more money in getting rid of food and drink as compared to previous lockdowns.
“Across all of our various outlets at Goodwood, there is no doubt that it has cost us a minimum of £10,000 each time that we go into lockdown and at Christmas it was probably £15,000.”
Matthew Henderson, Product Development Manager at Beamish Museum in County Durham, said:
“The unpredictable nature of the pandemic has made it incredibly hard for stock management and has meant we’ve had to be very cautious with our buying.
“Throughout these difficult periods we have adapted our buying to buy smaller quantities more regularly – Christmas for instance we were buying weekly, where we would normally buy 6-8 weeks of stock in one go, it made it more challenging for lead in times, but we were determined to minimise wastage where possible.”
Results from the latest BCC survey on the impact of Coronavirus on businesses show they have been pushed to the brink by the effect of multiple lockdowns.
Among the sobering findings from the survey of more than 1,100 businesses are:
The leading business group has called on the UK government to set out a clear roadmap for reopening, advancing vaccination and workplace testing plans, and extending key financial support measures for businesses throughout 2021.
Business conditions worsen
Compared to October 2020, 61% of firms reported decreased revenue from UK customers. Only 19% of firms reported increased revenue and 20% reported no change. B2C service firms are significantly more likely to report decreased revenue (74%) from UK customers, as are firms with less than 10 employees (65%).
When asked approximately how long firms could continue until they ran out of cash, almost one-quarter (23%) said less than three months. This figure rises to almost one-third (31%) of B2C service firms. Just over one quarter (28%) of firms overall and only one-fifth (20%) of B2C firms have cash for more than 12 months.
The results paint a bleak picture of a business landscape which has been severely squeezed by repeated lockdowns and massive changes in trading conditions. The survey results also suggest that without the huge amount of government support given to companies to date, that business failures and job losses could have been much worse.
Crucially, more support is needed until firms can fully reopen, with just over a quarter (28%) of businesses indicating they have enough cash to last more than a year. On average, B2C firms are currently operating at only 42 per cent of full capacity, while all firms were averaging 57% capacity against a pre-pandemic level of 75 to 80 per cent. Almost half (48%) of companies reported they still have staff on furlough.
Rating the support from government
When asked to rate the effectiveness of the various government schemes to support their business throughout the crisis, the Coronavirus Job Retention Scheme (CJRS), allowing firms to furlough staff, had by far the highest effectiveness rating. More than two-thirds (68%) using this scheme say that it has been very effective, with a further 28% rating it as somewhat effective. Only 4% said it was not effective.
Other schemes with high effectiveness ratings included Government loan schemes (such as CBILS and BBLS) where 46% rated them ‘very effective’ and 44% rated them ‘somewhat effective’, and the local authority business grant scheme, where 45% rated it ‘very effective’ and 40% rated it ‘somewhat effective’. Business rates relief (49%), VAT deferrals (34%), VAT cuts for certain sectors of the economy (26%) were also rated as very effective.
What firms may do if support expires in March and April
When asked what their business might do if the government support schemes end according to published timetable in March and April, 25% of firms overall said they would ‘make staff redundant’, 25% would ‘reduce staff hours’ and 19% would ‘cancel or reduce investment or recruitment plans’. Only 21% of B2C firms said the expiry of support ‘would have no impact on their business’, compared with 39% of B2B firms and 37% of manufacturers.
Responding to the survey results, BCC Director General Dr Adam Marshall said:
“The last year has taken a heavy toll on businesses across the UK. With cash flow still the top concern, it is vital that the UK government keeps financial support going until firms can reopen and rebuild. Pulling the plug now would be a huge mistake, and would be akin to writing off the billions already spent helping firms to survive.
“Firms are desperate to start trading again so they can boost revenue and start thinking about the future. To do so they need to see a clear, evidence-based plan for reopening, and they need time to get back on their feet without unnecessary additional taxes, and the security of knowing that Government will once again support them should we see additional restrictions imposed at any point.
“In the meantime, support must remain in place for firms that need it until a full reopening of the economy is possible. With cashflow being a major challenge for many businesses, we can expect to see further redundancies or business failures should Government support end prematurely.
“Alongside a clear roadmap for reopening, business confidence will also come from a commitment to further accelerate the vaccination programme and a wider workplace testing strategy that’s accessible to businesses of all sizes.”
Business views on financial support
Philip Miller, company director of the Stockvale Group, which operates the Adventure Island fun park, Sealife Adventure and several restaurants in Southend-on-Sea, Essex, said:
“Overall, I am very impressed with the Chancellor who went above and beyond on support measures for small businesses – with measures such as the job retention scheme, expanding business rates relief, grant support and VAT reductions and deferral all being great aids for helping my businesses to deal with the challenges of the pandemic and the subsequent lockdowns. This encouragement was an absolutely vital lifeline that helped us deal with the falls in revenue and strain of going through three lockdowns.
“One of the main problems we faced as a business was having to spend vast amounts of money making our businesses Covid-proof, just to be told that we had to remain shut. This was a terrible hit and, in general, the stop and start nature of the restrictions has been one of the most difficult aspects of dealing with the pandemic so far
“Going forward it is necessary for the Chancellor and the Government to provide businesses with more clarity and certainty, not just on coming out of the lockdown and when we can trade again, but also in terms of what support measures will be extended and expanded. If the chancellor was to announce any help measures going forward it would encourage businesses like mine to keep borrowing and or just keep going. I’m sure it would encourage banks to be more supportive as well. Knowing what is coming next is vital.”
Greg Majchrzak, managing director of Tufcot Engineering Ltd, in Sheffield, said:
“We feel as a company that the Government support so far has been excellent towards not only manufacturing but most companies across the whole UK.
“Without the furlough scheme we would certainly have been planning redundancy reviews on a larger scale but due to the support we managed to keep redundancies to the bare minimum.
”Tufcot only required the furlough scheme and apprentice support, and we coupled this with a working from home schedule for all office staff. All of our employees were on board with the above approach and I’m sure they all appreciated that they got 80% of their wage instead of what would have inevitably been a redundancy review and job losses.”
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