Brexit: London Mayor warns £50bn investment could be lost over 12 years with ‘no deal’

Wikimedia commons/Mayor of London

( via — Thur, 11 Jan 2018) London, UK —

LONDON (Reuters) – Britain could lose almost 500,000 jobs and 50 billion pounds investment over the next 12 years if it fails to agree a trade deal with the European Union, according to a report commissioned by London Mayor Sadiq Khan.

Cambridge Econometrics, an economics consultancy, looked at five different Brexit scenarios, from the hardest to the softest form of Brexit, and broke down the economic impact on nine industries, from construction to finance.

The study said that in a no-deal scenario, the industry that fares the worst will be financial and professional services, with as many as 119,000 fewer jobs nationwide.

“If the Government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment,” Khan said. “Ministers are fast running out of time to turn the negotiations around.”

Britain and the EU will soon begin the much harder task of defining their future trading relationship, after settling the broad terms of their divorce settlement last month.

A stand-off between Britain and the EU over the future access to single market for London’s vast financial services industry is shaping up to be one of the key Brexit battlegrounds before Britain is due to leave the bloc in March 2019.

Reporting By Andrew Mac


BCC warns shortage of skilled workers in the UK is reaching ‘critical levels’

( via– Wed, 10 Jan, 2018) London, Uk – –

A business group warns the crisis is the biggest potential drag on firms in 2018, as “it is people that make businesses work”

The shortage of skilled workers in the UK is reaching “critical levels” and a large number of companies are struggling to recruit qualified staff, a business group has warned.

Research by the British Chambers of Commerce (BCC) showed 71% of businesses in the services sector are finding it difficult to hire the right workers – the highest figure on record.

Three-quarters of manufacturing firms that were hiring also had problems finding workers with the right skillset.

The findings coincide with fears that the economy is already suffering a brain drain amid uncertainty over immigration and trade rules after the UK leaves the European Union.

Official figures released in November showed a leap in the number of EU citizens leaving Britain in the 12 months to June.

But the BCC has suggested that the Brexit vote is only part of a wider issue, as employment levels remain historically high despite a slowdown in investment, recruitment and output.

Director general Dr Adam Marshall said: “While there are many business bright spots across the UK, the evidence from the biggest private business survey in the country shows that growth and confidence remain subdued overall as we enter a new year.

“Labour and skills shortages are set to be the biggest potential drag anchor on business in 2018, since ultimately it is people that make businesses work.

“Business itself must do more, by training and investing wherever possible in people, but Government must also give firms the confidence to put their livelihoods on the line and go for growth.

“This must be the year employers act rather than just complain on skills, and the year Government delivers clarity, leadership and investment in people and infrastructure. Kick-starting growth, and boosting wages and prosperity for all, depends on this.

“Other findings from the survey included cost pressures remaining a worry for demand in the economy – especially among consumer-facing firms such as retailers.

Suren Thiru, the BCC’s head of economics, said: “Looking forward, the UK economy is set to continue on an underwhelming growth trajectory over the near term with uncertainty over the impact of Brexit coupled with high inflation and weak productivity likely to dampen overall economic activity.”

The Government was yet to reply for a request for comment on the report.

By James Sillars


Workplace automation will bring greater inequality IPPR warns


( via – – Fri, 29 Dec 2017) London, Uk – –

The rise of the robots will bring with it greater inequality rather than mass unemployment, according to fresh research.

Fears of automated machines replacing humans have led to many predicting that humans will become obsolete. But analysis by the IPPR think tank warned that it is more likely to increase pay inequality and that less well paid low skilled jobs are more likely to be automated.

“Despite the rhetoric of the rise of the robots, machines aren’t about to take all our jobs. While technological change will reshape how we work and what we do, it won’t eliminate employment,” said IPPR senior research fellow Matthew Lawrence.

“A bigger challenge is arguably the effect of automation on inequality in the UK. Managed badly, the benefits of automation could be narrowly concentrated, benefiting those who own capital and highly skilled workers.”

It estimates that jobs with wages worth £290bn a year – a third of all earnings in the economy – are at risk of automation. This may be offset by a rise in wages elsewhere due to higher output and productivity, which it predicts to grow by between 0.8 per cent and 1.4 per cent annually while boosting GDP by 10 per cent by 2030

But the think tank warned that these rewards must be distributed fairly.

“To avoid inequality rising, the government should look at ways to spread capital ownership, and make sure everyone benefits from increased automation,” said IPPR research fellow Carys Roberts.

By Lynsey Barber



Agency workers paid £400m a year less due to exploited legal loopholes

Alan Clark/Flickr

( via – – Thur, 21 2017) London, Uk – –

Admin workers are losing up to £1,000 a year because of employers exploiting legal loopholes

Agency workers are being paid £400m a year less than the permanent staff they work alongside, with the average admin worker out of pocket by nearly £1,000, a new study has revealed.

According to think-tank the Resolution Foundation,  85 per cent of these workers have been in an agency job for more than three months, which entitles them to equal pay under the law in almost all circumstances.

Despite this, agency workers are still losing £300m a year due to lack of pay parity with other employees.

The study found that workers in admin lose on average of £990 a year, while those in sales and customer service occupations were down to the tune of £803.

The Foundation’s analysis compared the hourly wage of agency workers and employees with the same personal characteristics such as age and ethnicity doing the same type of work.

It found that between 2011 and 2017 the average agency worker was paid 23p less an hour than their colleagues.

The charity said that the pay penalties exist despite the Agency Worker Regulations introduced in 2010 which gives those with 12 weeks-plus of continuous service pay parity with other employees.

These regulations allow agency staff to forgo their right to equal pay with direct employees in return for a contract that offers pay between assignments, but such contracts are often abused by employers, the foundation said.

Lindsay Judge, senior policy analyst at the Resolution Foundation, said that the Government needed to close these loopholes and enforce equal pay rights for agency workers.

“Agency workers deserve to be paid the same as employees if they’re doing the same job, so the Government should look to close the loophole that allows agency workers to sign away their right to equal pay. With the government-commissioned Taylor Review noting this abuse, we’re hopeful that 2018 will be the year of action on fair pay for agency workers,” Ms Judge said.

“Many workers prefer the flexibility that agency work can sometimes offer, and are willing to be paid less as a result, but those doing the same job on the same terms as employee colleagues deserve to take home the same day’s pay,” she added.

The analysis found that the agency pay penalty varies considerably by occupation, with agency-employed managers actually seeing a bonus, which may be in part compensation for missing out on pension contributions.

There are also premiums for those working in less predictable sectors such as social care which legally allow agencies to command a higher price to fill last minute gaps in staffing schedules, the charity said.

TUC general secretary Frances O’Grady said: “Two people working next to each other, doing the same job, should get the same pay rates. But too often agency workers are treated like second-class citizens.

“That’s because there’s a loophole in the law that allows bad bosses to deny agency workers equal pay.

“It’s time to end this Undercutters’ Charter and for the Government to scrap this loophole. It’s recent review into modern employment practices called for precisely that.”

By Stephen Little


Black Friday gave unexpected boost to retail sales

( via — Thur, 14 Dec 2017) London, UK —

LONDON (Reuters) – British shoppers pounced on electrical goods and other Black Friday bargains last month, giving an unexpectedly big boost to retail sales, which contrasted with earlier signs of a subdued start to Christmas spending.

Consumers have been squeezed through most of this year by rising inflation which hit its highest in nearly six years last month, at a time when wages are failing to keep up.

But there was some unexpected cheer for retailers in November data from the Office for National Statistics, which showed sales volumes were 1.6 percent higher than a year ago, beating all forecasts in a Reuters poll of economists.

Spending in cash terms was 4.7 percent higher.

The market reaction was muted and some economists said the surge in retail sales might reflect Christmas spending being brought forward to take advantage of Black Friday discounts.

“The boost from Black Friday will be fleeting,” Samuel Tombs of Pantheon Macroeconomics said.

The figures may provide some reassurance to the Bank of England, which raised interest rates for the first time in over a decade last month and will publish its latest rate decision at 1200 GMT.

Kallum Pickering, an economist with Berenberg Bank, said the figures added to signs from factories that Britain’s economy was picking up a bit of speed in late 2017 and he expected that momentum to continue into 2018.

“The risk from inflation to real spending growth has been exaggerated. Households will simply borrow a little more and save a little less to smooth out their consumption,” he said.

On the month, overall retail sales were 1.1 percent higher, up from growth of 0.5 percent in October and much stronger than economists’ forecasts of a 0.4 percent rise.

Household goods stores specifically reported that Black Friday promotions had boosted sales, the ONS said, with the amount of electrical household appliances sold jumping by nearly 9 percent compared with October.

The data are seasonally adjusted, but the agency said this may not fully strip out the effect of Black Friday, as the promotion period – a relatively recent phenomenon borrowed from the United States – has increased in Britain in recent years.

Looking at the past three months as a whole, which smoothes out monthly volatility, the picture is gloomier. Sales in the three months to November grew by just 1.0 percent compared with a year earlier, the weakest since May 2013.

When the BoE raised interest rates on Nov. 2, it forecast real-terms household consumption growth would slow to 1 percent next year from 1.5 percent predicted for this year as demand shifted towards business investment and exports.

Official data earlier this week showed that consumer price inflation rose to its highest in nearly six years at 3.1 percent in November, while the number of people in work fell for a second consecutive month.

Food prices are rising at their fastest rate in four years, adding to the squeeze on household budgets. The ONS data showed the volume of food purchased was 0.1 percent lower than a year before, while spending on food was up by 3.5 percent.

This week British electronics retailer Dixons Carphone said it had enjoyed record sales during November’s Black Friday promotion, despite weak demand for mobile phones that hit profits.

But home furnishings company Carpetright (CPRC.L) cut forecasts after warning of fragile consumer confidence.

The British Retail Consortium said last week its members had seen subdued sales last month and credit card company Visa reported the first year-on-year fall in inflation-adjusted spending in five years as Britons cut back on big purchases.


Relativity the company going to space on the cheap


Relativity Space and its two founders – Tim and Jordan – have a plan to make rockets faster and cheaper than anyone else. To do this, they’re looking to build every part of a rocket – its engine, its fuel tanks and its body – with giant 3D printers.

Entrepreneurs looking to exit at a rate not seen in years

( via – – Wed, 20 Sept 2017) London, Uk – –

Entrepreneurs are looking to downsize, sell or close their firms at a rate not seen in years, a survey has suggested.

The Federation of Small Business (FSB) found that 13% of respondents were looking for ways out of their business, the highest percentage since it began measuring in 2012.

The survey also indicated that optimism among small firms had tumbled.

The FSB blamed the fall in optimism on rising costs and a weaker UK economy.

“A record proportion of business owners currently expect to downsize, sell or shut up shop, while rent and taxation are frequently mentioned as causes of increased costs. We need to see more support in this space – that includes ending enforcement of the ridiculous ‘staircase tax’,” said Mike Cherry, FSB National Chairman.

The term “staircase tax” emerged when some firms found they were paying extra business rates because they had an office divided by a staircase.

The FSB’s Small Business Index is based on a survey of 1,230 of its members and was last conducted in July – the responses were used to create a weighted index.

In July, the confidence index fell to 1 from 15 in the previous quarter. The lowest levels of confidence were seen in retail and entertainment firms, according to the FSB.

Exporting happiness

However, the FSB noted that confidence has been rising among exporters, with 40% reporting an increase in overseas sales.

Exporters have been boosted by the weakened pound, which helps make their products more competitively priced overseas.

The report also indicated that, overall, small firms are looking to increase their workforce.

“Employment intentions are up, but so too are labour costs. This is causing significant problems in a number of sectors, not least hospitality and retail,” Mr Cherry said.

“With conference season and the Autumn Budget approaching, policymakers have an opportunity to restore optimism.”

The number of people on zero hours contracts in the UK falls

Tim Tabor/flickr

( via – – Tue, 19 Sept 2017) London, Uk – –

The number of people on zero hours contracts in the UK has fallen slightly, according to the latest official figures.

Between April and June 2017, the Office for National Statistics (ONS) said that 883,000 people were on contracts that do not guarantee work.

This is 2.2% lower than the figure from the same period in 2016.

However, the proportion of British workers on zero-hours contracts remained broadly flat at 2.8%.

In July, a government review of employment practices said too many employers and businesses were relying on zero-hours, short-hours or agency contracts, when they could be more forward-thinking in their scheduling.

It did not call for a ban, but did suggest reforms such as reclassifying workers for platform-based firms such as Uber as “dependent contractors” and improving in-work training.

The prime minister said the government would take the report’s recommendations seriously.

UK manufacturing hits four month high hinting at stronger growth

( via — Fri, 1 Sept 2017) London, UK —

LONDON (Reuters) – Britain’s factories grew a lot more strongly than expected in August as work flowed in from home and abroad, a survey showed on Friday, suggesting the economy might be picking up speed after a slow first half of 2017.

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to 56.9 from 55.3 in July, higher than any forecasts in a Reuters poll of economists.

Manufacturing accounts for only around 10 percent of the British economy. But Rob Dobson, a director at IHS Markit, said the strong performance last month, after a good July, should help support overall growth in the third quarter.

That could “add fuel to hawkish (Bank of England) policymakers’ calls for higher interest rates,” he said. The BoE’s rate-setters voted 6-2 against a rate hike in August with most policymakers expressing concern about the impact of last year’s Brexit vote on the economy.

Dobson said it looked likely that manufacturing would keep up its growth in the near term because the pick-up was being felt across the sector and among small and large firms alike.

While there were some signs of shortages of workers and material, “at the moment, the survey data suggest that the manufacturing economy remains in good health despite Brexit uncertainty,” he said.

However, there has been a marked discrepancy in recent months between the PMI readings of the manufacturing sector and official data which has painted a weaker picture.

IHS Markit said manufacturing output growth in August hit a seven-month high and new orders rose at the fastest pace in three months.

Growth in exports eased off only slightly from a seven-year high in July, helped by stronger demand from key markets in Europe, the United States and elsewhere and by the fall in the value of the pound since the Brexit vote.


Enterprise Ireland Fund Worth up to €750,000 Offered to Start-ups


( via – – Wed, 30 Aug, 2017) London, Uk – –

Competition open to agricultural, manufacturing, life sciences and renewables sectors

A fund worth up to €750,000 has been made available for start-ups by Enterprise Ireland.

The “competitive start fund competition” will open for applications to early stage companies in manufacturing and internationally traded services on September 13th.

The competition is open to all sectors with a focus on agricultural, manufacturing, life sciences and renewables subsectors.

Up to 15 successful applicants will receive high-level business development support and an investment of up to €50,000 each. The fund is designed to “accelerate the growth of start-ups and enable companies to reach key commercial and technical milestones”.

Joe Healy, divisional manager of high potential start-ups with Enterprise Ireland, said a key priority was “supporting start-ups with global ambition”.

“We do this through funding to help get businesses off the ground while also offering valuable business support and networking opportunities,” he said.

“The Enterprise Ireland start-up team is looking for applications from start-ups working in all sectors. In particular, the areas of agritech, agribusiness, agricultural machinery, eHealth, digital health, medical devices, diagnostics and cleantech.

“Since the start of the year, we’ve seen an increased number of applications to our competitive start funds and we are anticipating more great, innovative ideas with global market appeal in this call.”

Minister for Enterprise Frances Fitzgerald said start-ups offering innovative products and services were “the lifeblood of the economy”.

“Enterprise Ireland’s competitive start fund injects vital early stage funding into companies who have the potential to thrive in international markets,” he said.

“Now that the rates of early stage entrepreneurship in Ireland have returned to pre-recession levels, the success of start-up activity will depend on this kind of funding as well as the crucial advice, training and business introductions offered by Enterprise Ireland to successful CSF applicants.”

Applications are invited from companies that are active in the relevant industrial sectors or individuals who, prior to Enterprise Ireland’s investment, are based in the Republic and have a headquarters registered here.

In addition to written online applications, companies will be asked to prepare an online video pitch. The fund will close for applications at 3pm on September 27th.

By Colin Gleeson

Farmstand Pop-up Health Food Business Taking London By Storm

“If you’re launching an online-only food business, you’re competing with hundreds of thousands of stores; if you want to create a high street chain, you’re up against Pret and McDonald’s,” says Steven Novick, founder of health food business Farmstand. Faced with this conundrum, Novick has eschewed more traditional business models.

After launching a restaurant in Covent Garden, London, Novick took a nimble approach to growth. Over the past 18 months, he’s opened 17 pop-ups across the capital in office canteens, a stand in Planet Organic and corporate catering and delivery services.

Due to London’s high commercial rents, and the doubling of business rates in some areas, it’s not economical for a small firm to rent lots of property, so Farmstand has streamlined operations. All of its food is prepared in a 2,000 sq ft kitchen in south London, from where it is delivered to pop-ups and business customers (around 30 subscribe to a daily delivery) across the city. Its deliveries are outsourced to an experienced courier.

Headcount is also kept to the minimum: 16 full-time staff, with 11 working in the central kitchen and five serving in the Covent Garden restaurant. Farmstand’s in-office pop-ups are staffed by the customer. With this approach, Farmstand’s revenue has grown by an average of 26% month-on-month since opening in February 2016.

Another business with a canny growth strategy is Chester-based, AM Custom Clothing, which provides personalised, printed garments (from T-shirts to lanyards) to universities and businesses. Co-founder Alex Franklin says: “A lot of fashion companies will have have warehouses filled with stock, but we have a unique relationship with our suppliers.” Franklin doesn’t store stock. Instead he calls on his network of 15-20 suppliers of plain clothing when an order comes in. Altogether, Franklin’s suppliers have around 12m items in stock.

However, getting to this point has not come without difficulty. In the past, the business has experienced much greater demand than anticipated, which put pressure on its supply chain. “Since then we have adapted our business model, to make it as scalable as possible, most of this was achieved through automation,” Franklin says. While stock shortages can still occur, the amount of stock at hand now allows the business to find alternatives when needed.

Automating orders and deliveries, and using a computer bot to follow-up on customer enquires, has also smoothed operations. But, Franklin adds, all clients have a dedicated account manager to ensure strong customer service.

While some businesses can handle most operations online, others do require a physical space. So how can entrepreneurs in this situation cut costs? Market stalls and pop-ups, which have been made more accessible thanks to apps such as Appear Here, are one way to trial locations without committing to long-term leases. Meanwhile, some small food businesses might opt for a service such as Deliveroo’s purpose-built kitchens, called Deliveroo Editions. Initially designed as overflow kitchens for established companies, now smaller firms are using these spaces to reach customers outside of their delivery area.

“They are very cheap to set up, so we decided to use them to bring new types of cuisines to areas where we found a gap,” says Rohan Pradhan, vice president of Deliveroo. Deliveroo sometimes takes a higher commission from the sale of small firms using its kitchens. This, Pradhan says, is in order to buffer the risk of the businesses not working out.

Pradhan cites Crust Bros pizza company as a successful example of this relationship. Crust Bros’ founder, Joseph Moore, started his business in 2014 as a stall on Southbank market, originally named Dough Bros. Using Deliveroo’s kitchen service, he has doubled sales. Moore says: “It’s been a good testbed for opening our first restaurant this summer, there were some teething issues at the start [such as pizzas not arriving with customers piping hot]. But now we’ve got the process down.”

Rapid expansion can also occur when entrepreneurs add a subscription element to their businesses – and it can be overwhelming. Vanessa McDermott, founder of creative startup Vee McDee, which delivers craft sets to customers, discovered this while crowdfunding on Kickstarter.

McDermott was raising money to launch a creative studio in Bolton. Through Kickstarter’s crowdfunding model, backers of her idea were offered craft sets as a reward. The sets proved a hit, word spread and people were soon asking where they could buy the packs. Then orders mushroomed. “I [quickly] went from selling 30 packs a month to 700,” says McDermott. “It was hard because keeping the quality up is so important to me, I didn’t want to lose that [as custom grew].”

To avoid this, McDermott outsourced the delivery of the kits to a subscription service that works with startups. “My advice would be to anyone in this position to partner with people who have the infrastructure in place to help with the technical and logistical side [of a subscription service],” she says.

Expanding a business while keeping outgoings lean can be a challenge, but these approaches offer food for thought. Some might still argue that a physical space is key to building a business. However, a more flexible approach has its benefits, says Ian Roberts, an SME adviser with Business Doctors consultancy. “To me, high levels of service and product quality are still a better way to build a strong and positive brand identity, than physical presence.”

Peter Kelly, a senior finance partner with PwC’s small business service MyFinance, agrees. He says that one of the hardest things when expanding is finding the right people to work with and identifying gaps in your expertise. He adds: “It’s hard because [your business] is your baby, but to expand efficiently while keeping up quality you should outsource if you can […] Use spare to money to invest in the areas that will help make [your business] profitable.”

By Helen Lock

Home Grown Produce Threatened by Brexit Workforce Shortage

( via – – Thur, 24 Aug 2017) London, Uk – –

The UK food industry has warned that a Brexit workforce shortage could leave a third of its businesses unviable.

The Food and Drink Federation said: “Our sector faces a rapidly approaching workforce shortage and skills gap.”

Its survey of the “farm-to-fork” supply chain said 31% of businesses had already seen EU workers leave the UK.

The FDA’s survey was conducted across a wide range of respected trade bodies, including the British Retail Consortium and the National Famers Union.

It added that almost half of those businesses surveyed said EU nationals working in the UK were considering leaving.

Big net migration fall since Brexit vote, latest estimates show

The federation is calling on the government to guarantee the rights of nationals from across the European Economic Area.

Ian Wright, its director-general, said: “It is only a matter of time before the uncertainty reported by businesses results in an irreversible exit of EU workers from these shores.

“Without our dedicated and valued workforce we would be unable to feed the nation.”

In April a report by the Commons Environment Food and Rural Affairs Committee said: “Evidence… suggests the current problem is in danger of becoming a crisis if urgent measures are not taken to fill the gaps in labour supply.”

A government spokesperson said: “In June we published our offer to protect the rights of EU citizens in the UK, confirming no-one living here lawfully will be asked to leave when we exit the EU and they will have a grace period to regularise their status.”

The federation said it had welcomed the government’s announcement. However, of the businesses it surveyed:

47% said EU nationals were considering leaving the UK
36% said they would become unviable if they had no access to EU workers
31% reported EU nationals leaving since the referendum
17% said they may relocate overseas if they had no access to EU nationals
The federation is calling on the government to ensure there is no abrupt reduction in the number of EU workers in the UK the day the country leaves the EU.

Mr Wright told the BBC: “What we don’t want is a sudden switch-off of the availability of EU workers who are part of the lifeblood of our industry.”

He added that there were a lot of practicalities in the government’s plans for EU workers “that we don’t know yet”.

“We don’t know how much it’s going to cost. We don’t know how dependents will be treated,” he told BBC Radio 4’s Today Programme.

“And crucially, in order to believe the scheme is going to work, you have to believe the Home Office can register two and a half million Europeans in a year. That defies some level of belief.”

Last month the National Farmers Union deputy president Minette Batters said: “The NFU cannot emphasise enough the urgent need for clarity and certainty on access to a competent and reliable workforce and all other issues relating to Brexit.

“The industry needs commitments that there will be sufficient numbers of permanent and seasonal workers from outside the UK post-Brexit.”


The government said in a statement: “After we leave the EU we must have an immigration system which works in the best interests of the UK.

“Crucial to the development of this will be the views from a range of businesses, including the agricultural, food, drink and manufacturing sectors.

“We will be setting out our initial proposals for this system in the autumn but we have already been clear there will be an implementation period after we leave the EU to avoid a cliff edge for businesses.”

In the longer term, the federation accepts it will have to adjust to the reduction in the number of EU workers.

“Over time [training local workers] is something that will have to happen as a result of the Brexit vote. We recognise that immigration was a big factor in the Brexit vote,” Mr Wright said.

To deal with fewer foreign workers, the federation will have a strong emphasis on building skills through apprenticeships and investment in technology to support automation, it said.

The survey was co-ordinated by the FDA, and as well as the BRC and the NFU, it gathered results from trade bodies the Association of Labour Providers, the British Beer and Pub Association, the British Hospitality Association, the Food and Drink Federation, and the Fresh Produce Consortium.

It said that across the various workforce surveys there were 627 responses, collectively representing almost a quarter of the food chain’s total employment of four million people.

Duty Free Booze Cruise Looks Set to Return

( via – – Fri, 18 Aug, 2017) London, Uk – –

It could happen in March 2019 when the UK leaves the customs union. Or it could be two or three years later if the proposed transitionary period is adopted. Nobody knows until it is settled at the Brexit talks. But the return of duty-free shopping on travel to and from the UK appears to be only a matter of time. After two decades docked in port, the booze cruise is set for a comeback.

The abolition of intra-European Union duty free on July 1st, 1999, was a landmark for the single market. It was one of those tangible moments that punctured the pall of Brussels bureaucracy for citizens, reaching into their everyday lives. No more cheap Superkings on the ferry back from Holyhead.

The abolition was originally pencilled in for 1993, when the single market was established, but European governments gave duty free a six-year reprieve after howls of protest from airports and airlines, ferry operators and the trade unions whose members staffed their duty-free shops.

Intra-EU duty free was an estimated €5 billion market back then, when the bloc had just 15 members. In the current age of high-frequency, low-cost air travel, who knows what the pot might reach this time on travel in and out of Britain?

Ireland-UK air passenger traffic is now approaching 12.8 million annually, with another 2.2 million on ferries. For Irish and British travel companies, that’s a new, 15 million-strong retail market that will soon be ripe for tapping.

But when? As soon as possible, if the industry gets its way.

‘Potential benefit’
Kevin Toland, the outgoing chief executive of airport operator DAA, told an Oireachtas committee in June that duty free on UK flights should commence “immediately” upon Brexit in 2019, “regardless of any transitional arrangements”.
The DAA said this week that, overall, “Brexit is a negative” but the potential reintroduction of duty free is “clearly a potential benefit” for Dublin and Cork airports.

“The exact relationship between the UK and the European Union post Brexit still remains unclear, but our hope would be that duty-free sales on travel between EU states and the UK would resume as soon as the UK leaves the EU rather than having to wait for the end of any transitional period,” it said.

The UK Chamber of Shipping, whose members include Irish Ferries, P&O and Stena, also wants the British government to push for the “automatic” reintroduction of duty free in 2019. Politicians on both sides have so far remained coy.

Kenny Jacobs, Ryanair’s chief marketing officer, says it is too early to speculate on the reintroduction of duty free on its flights to and from the UK. But the airline, ever alert for opportunities to boost ancillary revenues, has a plan.
“We have contingency plans in place for all eventualities,” Jacobs said.
For Irish travellers to the UK, a cursory examination indicates that the potential savings on alcohol and cigarettes – the most common duty-free fare – will be significant: up to 60 per cent on cigarettes and more on many spirits.

But given the fact that not even the most senior Brexit negotiators in London and Brussels have a clue what it will look like, we must make a few assumptions.

Let’s assume that, post Brexit, duty free returns at the pre-1999 allowances, which still exist for travel to all areas outside the EU. This means passengers returning to Ireland from the UK should each be able to bring in 200 cigarettes or 50 cigars, one litre of spirts, four litres of wine, 16 litres of beer, and €430 worth of other goods.

Duty free must be carried across a customs border under the rules. So Irish passengers flying to Britain from Dublin, for example, will not be able to use the airport’s intra-EU “shop and collect” service, which allows them buy goods on the way out and pick up on the way home. Irish shoppers will have to buy their inbound duty free aboard the ferry or aircraft home, or airside in a British airport.

World Duty Free is the biggest UK operator, operating at airports such as Heathrow. This week, it was advertising duty-free one-litre bottles of Jameson whiskey for £15.89 (€17.40). The same bottle was this week listed in Tesco Ireland for €36, and €47 in SuperValu, a saving of up to 62 per cent.
A one-litre bottle of Bombay Sapphire gin in Heathrow’s duty free currently costs €23.47. In Tesco Ireland, the same gin is priced at €42.85 per litre (based upon the €29.99 cost of a 70cl bottle), or 82 per cent more expensive.

One litre of Absolut Elyx top-shelf vodka is €51.56 at World of Duty Free in Heathrow, but currently €64 in SuperValu for 70cl (€91.42 a litre). That is a saving of 43 per cent on the Irish price. Another Cosmopolitan, please!

World of Duty Free doesn’t list cigarette prices online, but British Airways lists 200 Benson & Hedges on its “high-life” shop (where you purchase online and collect on the aircraft) for £41 (€45.04). It would cost €115 to buy 200 B&H in an Irish shop, a saving (for your wallet, if not your blackened lungs) of 60 per cent.Duty free means no VAT, customs or excise taxes. As excise is a volume-based tax, regardless of the product’s value, its effect is more pronounced on cheaper items. For example, excise adds the exact same cash cost to an €8 bottle of plonk as a €1,000 of the finest Bordeaux, but proportionally more.

Therefore, the savings can be less stark when buying high-end wines on duty free, and sometimes there is no saving at all. A bottle of 2011 Chateau Lynch-Bages, a fine Pauillac, is £165 (€180) at World of Duty Free in the UK. You can pick up the exact same wine in Le Caveau in Kilkenny for €119.

But overall, Irish travellers to the UK are in line for cheaper prices on booze and drink on the way home. The alcohol retail industry in Ireland is worried about the impact of the reintroduction of duty free on sales here, especially at peak times. The manufacturing industry should be broadly unaffected.
“It will be quite damaging at key holiday periods, such as Christmas,” said Evelyn Jones, public affairs director of off-licence lobby group Noffla and the owner of the Vintry in Rathgar, south Dublin.
“Lots of Irish emigrants would be travelling home at Christmas, and you can be sure they’d use their allowance to bring a bottle. It will have a particular impact on premium spirits.”
Noffla is signed up to the wider drink industry’s campaign for a budget cut in excise taxes, which in Ireland are among the highest in Europe. The industry wants an across-the-board cut of 15 per cent, which seems unlikely as it would cost the exchequer €223 million. Try selling the cost of that policy to the public when there’s an acute homelessness crisis.
But Jones says a cut would help offset the effects of a reintroduction of duty free to the UK: “Duty free will also encourage more illicit trade.”
Aviation industry
Britain’s departure from the EU is, overall, likely to be huge negative for the aviation industry. The possible reintroduction of duty free will not be enough of a silver lining to make the Brexit more bearable. Analysts have not built any potential boon into the forecasts for listed airlines, such as Ryanair.
“It might help airlines at the margins,” said Stephen Furlong of Davy stockbrokers. “This is probably something that will be bigger for the ferry operators, where onboard spending and the historical capture of duty-free sales was more material to their performance.”
Gerard Moore, an analyst with Investec, says Irish Continental Group, the stock-market owner of Irish Ferries, generated as much as “roughly half” its net profits from onboard duty-free sales in the late 1990s. That old rythmical clinkety-clink of the duty-free shop rolling on the waves was the sound of philharmonic profitability for ICG and its boss, Eamonn Rothwell.
“It would be a big silver lining once again for ICG,” said Moore. “The company’s view now is, if duty free came back, they’d do a much better job of retailing it this time round. But it might not make up such a significant slice of profits.”
He agrees that airlines would have less to gain, but “if anyone can do it, Ryanair can do it”.
Datalex, the stock market-listed travel software company backed by Dermot Desmond, helps airlines design digital systems to boost their ancillary earnings from activities such as retail.
Ornagh Hoban, its chief marketing officer, said Ireland-UK airlines could “invent a digital marketplace for duty free” by pushing sales on passengers at the booking stage or on the airline’s website, allowing travellers to pick up their goods at the airport or on the aircraft.
“Duty free as an opportunity could evolve to a greater stage. It might be an even bigger opportunity than before,” she says.
The return of duty free is often conflated with customs and the issue of Ireland’s border with the six counties of Northern Ireland, which upon Brexit will become the EU’s only supra-national frontier with the UK.

But there is unlikely to be any duty free between the North and the republic. Duty-free sales happen in transit or at ports of exit. There are currently no direct flights between the Republic and the North. Duty free is unlikely to be much of a factor, unless someone opens a drive-through facility on the M1.
There has always been smuggling across the Border, however. Here’s a potential scenario to finish up that might help illustrate the unintended consequences of the Brexit vote, and the spaghetti bowl of problems facing the negotiators.
This summer, a new car ferry began operating across Carlingford Lough from Co Louth to Co Down. Its owners have said the reintroduction of duty free to UK travel could create an opportunity for the business.
It is only a 15-minute crossing, however. That wouldn’t leave much time to ditch the car on the ferry and leg it up to duty free for a carton of Marlboro and a few bottles of Campo Viejo.
But let’s assume duty free is allowed on the short crossing. What will there be to stop some enterprising soul spending all day, every day, crossing over and back from each side of the lough on the ferry, maxing out their duty free allowance on each journey, and “gifting” the haul to accomplices on either bank?

UK Exports to the EU benefits from surge in sales in the first half of this year

( via – – Fri, 18 Aug, 2017) London, Uk – –

Britain’s factories benefited from a surge in sales to the EU in the first half of this year as export growth outstripped import growth.

The UK still imports far more than it exports leaving the country with a goods deficit amounting to €53bn (£48bn) for the six months to June in its trade with the EU, but that is down from €57.8bn in the same period of 2016.

A weaker pound means British-made goods are more competitive abroad, while imports are more expensive to UK companies and consumers.

Britain exports €104bn of goods to the rest of the world, outweighing the €94.7bn of goods it sends to EU customers. But UK imports from the EU amount to €147.7bn, while those from elsewhere come in at €134.7bn.

The UK’s total trade deficit has shrunk from €102.2bn in the first half of 2016 to €83.7bn this year.

The annual snapshot of international trade, published by Eurostat, lends weight to arguments that the EU depends heavily on Britain’s market for its products but also showed that British business relies on trade with the bloc.

The British trade deficit could give leverage to British Brexit negotiators who travel to Brussels for the third round of talks next month. This week the government published a position paper calling for UK-EU trade to remain as frictionless as possible.

In June Germany exported almost twice as much to Britain as it imported – €6.8bn to €3.6bn – leaving the UK with a €3.2bn deficit in the month.

France, the other member state with the most influence on the Brexit talks, sold €2.9bn-worth of goods to Britain and imported just over €2.7bn, leaving a more modest gap of €178m.

But Britain sold more goods to Ireland (€1.9bn) than it imported (€1.2bn). Preserving the “invisible border” between Northern Ireland and Ireland will be discussed by British and EU Brexit negotiators in the week of August 28.

At the same time the Food and Drinks Federation said exports from Britain soared 8.5pc to a record high of £10.2bn in the first half of the year.

“It is great to see such strong growth in our exports to EU Member States,” said the group’s director general Ian Wright.

“The EU remains an essential market for UK exports as well as for supplies of key ingredients and raw materials used by our industry. We believe there are significant opportunities to grow our sector’s exports further still.”

By James Crisp Tim Wallace

UK Shoppers Faced With Rising Prices Switching to Cheaper Products

( via — Thur, 10 Aug, 2017) London, UK —

LONDON (Reuters) – British firms are keeping a lid on pay and automating more production while some shoppers, faced with rising prices, are switching to cheaper products, the Bank of England said on Wednesday.

The findings came in a report from around the country that showed Brexit is hurting households, mainly though the weaker pound.

Businesses serving British consumers are suffering compared with export-focused manufacturers, as the weaker exchange rate and higher inflation following last year’s vote to leave the European Union feeds through the economy.

Last week BoE Governor Mark Carney said Britain’s economy was suffering from uncertainty and higher prices caused by the referendum decision in June 2016, and the central bank cut its forecasts for future growth and wages.

Wednesday’s report by the BoE’s regional staff — which fed into last week’s forecasts — showed businesses planned to offer pay awards of between 2 and 3 percent, despite growing recruitment difficulties.

“Overall employment intentions remained modest,” the BoE said. “Growth in manufacturing (employment) intentions was stable and was dampened by a stronger focus on productivity improvements and automation over job creation,” it added.

The BoE forecast last week that economic growth would slow to 1.7 percent this year and 1.6 percent in 2018, while wages are seen rising by 2 percent and then 3 percent.

After unexpectedly outperforming other big advanced economies last year, in 2017 Britain had its slowest first half of the year since 2012.

Firms reported prices for goods and services rose at the fastest pace in four years, in line with official measures of inflation, and consumer spending growth slowed.

“Some contacts ascribed this to increased caution among consumers, and to consumers trading down to cheaper products or brands,” the BoE said.

Sales at consumer services businesses grew at their slowest pace in over four years, while manufacturing exports saw their fastest expansion since 2011.

Business investment – which the BoE hopes will offset some of the damage to consumer spending – remained modest, with unspecified “uncertainty” weighing on longer-term plans.

The agents’ report on contacts with businesses in June and the first half of July, which includes the period when Prime Minister Theresa May unexpectedly failed to win a parliamentary majority, as well as the start of Brexit talks in Brussels.

Reporting by David Milliken; Editing by William Schomberg and Jeremy Gaunt

By David Milliken

QLM Business News and Market Analyses Now Available Digitally


QLM Business News Digital Media Channel for offering the latest business news as well as market analyses. Thanks to the fast-paced life people lead, most busy business people prefer to browse the Net on the go in order to keep up with the latest business news.

Theresa May will fail to deliver EU trade deal in 2019, OECD predicts

Brexit talks
Number 10/

Theresa May will fail to secure a comprehensive free trade agreement with the rest of the EU by 2019 in a development that would mean a destructive “cliff-edge” Brexit for the UK, the OECD has predicted.

In its latest Global Economic Outlook report, the Paris-based multilateral economic organisation has upgraded its 2017 GDP growth forecast for the UK to 1.6 per cent, up from 1.2 per cent last November.

But it is still anticipating a sharp slowdown in UK growth to just 1 per cent in 2018.

“This projection critically assumes that ‘most favoured nation’ treatment will govern UK trade after the United Kingdom leaves the European Union in 2019,” the OECD says, referencing a description of the way that countries must trade with each other under minimal World Trade Organisation rules.

In her Lancaster House speech in January, Theresa May said that she wanted to conclude a “a new, comprehensive, bold and ambitious free trade agreement” with the rest of the EU.

The Prime Minister also signalled her willingness to agree a “transitional” deal post 2019, which would allow trade to carry on unimpeded while such an overarching free trade agreement was concluded.

But she also warned that “no deal is better than a bad deal”, implying that she could also walk away from the negotiating deal and that the UK could crash out of the EU’s single market and customs union with no new agreement in place.

That latter threat was also contained in the Conservative manifesto.
The WTO outcome would imply, among many other things, 10 per cent tariffs on UK car exports to the EU, tight quotas on agricultural exports and an abrupt end to the right of UK financial firms to operate in Europe.

The OECD’s baseline assumption is that this is what materialises – and also that the UK has no other new free trade deals with other non-EU countries in place by 2019.

It said that the channels through which this would likely adversely impact the UK economy next year were through weaker household consumption, confidence and investment.

“The major risk for the economy is the uncertainty surrounding the exit process from the European Union. Higher uncertainty could hamper domestic and foreign investment more than projected,” the OECD writes.

Catherine Mann, the OECD’s chief economist, told The Independent that it was sticking with the same WTO Brexit outcome it used in previous UK forecasts made since last June’s referendum.

“Discussions regarding the nature of trade modalities, the time table for any deal, as well as interim agreements are on-going between the UK and the EU. We continue with the same assumption of WTO ‘Most Favoured Nation’ basis, as in our previous projections.” she said.

The overwhelming majority of economists expect that a cliff-edge Brexit would be highly damaging for the UK economy.

Researchers from the London School of Economics estimate that it would cost 2.6 per cent of GDP by 2020, rising to 9.5 per cent by 2030.

The one detailed study that argues trading on WTO rules post 2019 would boost the UK economy has been severely criticised as methodologically flawed and making wildly implausible assumptions.

Business groups have warned loudly about the catastrophic impact of a “no deal” Brexit, with the CBI president Paul Dreschler saying it would “open Pandora’s box” for firms.

In its latest report, the OECD also argues that Britain needs a major increase in infrastructure spending, something more in line with Labour’s manifesto pledges than the Conservatives’.

“Higher investment in transport infrastructure, in particular in less productive regions, would improve connectivity and the diffusion of knowledge,” the OECD says.

Labour’s manifesto also promises a free trade agreement with the EU and explicitly rejects “no deal” as a viable option.

The UK’s GDP growth slowed to just 0.2 per cent in the first quarter of 2017, well down from the 0.7 per cent expansion in the final quarter of 2016.

This was the joint slowest quarterly expansion of any G7 country, alongside Italy, although growth is expected to pick up somewhat in the following quarter.

Responding to the OECD report Vince Cable, the Liberal Democrat shadow Chancellor, said: “Voters should listen to this eve of poll warning on the major economic risk posed by Theresa May’s reckless approach to Brexit.”

“The hardline approach [she] has taken, insisting that no deal is better than a bad deal and planning to take us out of the single market, will seriously damage opportunities and jobs for years to come. The Liberal Democrats will fight to keep Britain in the single market and customs union, and to ensure the people have the final say on the Brexit deal.”

Bu Ben Chu

RBS adjourned investors case in 11th-hour bid to settle


( via — Mon, 22 May, 2017) London, UK —

Royal Bank of Scotland (RBS) (RBS.L) pursued last-minute settlement talks with a group of investors on Monday to avoid a potentially embarrassing trial over allegations the lender misled them about a 2008 capital increase.

A successful settlement would save former RBS Chief Executive Fred Goodwin from facing scrutiny in the courts over his decision-making and leadership at the time the lender almost collapsed.

RBS has doubled its offer to the remaining claimants as it seeks to settle the case, two people close to the matter told Reuters on Monday.

The civil trial brought by thousands of RBS investors was due to open at the High Court in London on Monday but was adjourned for a day to allow the settlement talks to continue.

The plaintiffs allege former executives gave a misleading picture of the bank’s financial health ahead of a 12 billion pound ($15.5 billion) cash call in 2008. Months after the cash call, RBS had to be rescued by the government with a 45.8 billion pound bailout.

RBS, which remains more than 70 percent state-owned, denies any wrongdoing over the 2008 rights issue and says its former bosses did not act illegally.

Jonathan Nash, a lawyer representing the claimants, appealed in court for an adjournment saying the two parties were in settlement talks and wanted longer to strike a deal.

“We are involved in settlement discussions and we are hopeful of making progress,” Nash said.

The sources said RBS Chief Executive Ross McEwan was directly involved in talks over the weekend and that the bank had offered more than 80 pence for each RBS share held, though it was not clear if any investors have accepted the offer.

A settlement at that price would cost RBS “in the tens of millions of pounds”, a third source familiar with the matter said.

The bank has settled with 87 percent of the investors who originally brought the case but the others have so far rejected its offers and say they were determined to go to court.

By doubling the amount on offer, RBS is close to a sum the remaining investors would accept, one of the sources said, indicating that they might settle if RBS raises its offer to 100 pence per share.

That represents half of the 200 pence per share investors paid at the time of the rights issue.

The outstanding group represents about 9,000 retail shareholders and 20 institutional investors. The large investors include U.S. bank Wells Fargo (WFC.N), the Boeing (BA.N) pension fund, Bank of America Merrill Lynch (BAC.N) and local British council pension funds.

RBS declined to comment on the settlement offer.

By Andrew MacAskill and Lawrence White