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Businesses’ Brexit fears dismissed

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Airbus: Warned of risk of capital flight

THE RECENT conduct of Foreign Secretary Boris Johnson has led to fears that the future of the UK’s business relationships with Europe are of secondary interest to senior government ministers.

A strongly-worded statement from the CBI, warning policy makers to ‘focus on business priorities and put evidence above political ideology’ was greeted with Mr Johnson remarking ‘f**k business’.

Those remarks were preceded by the Foreign Secretary being recorded saying that the border with Ireland was a minor issue of little consequence in the context of Brexit.

The CBI subsequently suggested that it will ensure negotiators on both sides ‘are well equipped with the unequivocal economic facts’.

Whether the facts fit the Foreign Secretary’s preconceptions of what Brexit might mean for the UK’s businesses is open to question.

AIRBUS RAISES STAKES

A similar gap between reality and ideology was exposed by the warning from Airbus that – in order to continue to comply with the European regulatory framework – it might have to move its base of operations from Broughton in Clwyd, where it supports 6,500 directly employed jobs and businesses and the economy over a much wider area.

In the absence of a Brexit agreement, UK aerospace companies will not be covered by existing approvals. More than 10,000 original aircraft parts originate in the UK, the manufacture of which is covered by tight regulations requiring certification by the European Aviation Safety Agency. Should a single parts supplier not be certified, its parts cannot be installed and aircraft will not be delivered.

If a supply chain agreement is not reached with the EU, the consequences for the aviation industry selling into the EU trading bloc will be a disaster for the UK.

BUSINESSES TOLD TO BUTT OUT

However, the unwelcome intervention of facts in the Brexit narrative roused Health Secretary Jeremy (H)unt to tell the BBC’s Andrew Marr that talking about job losses risked undermining the government in its negotiations with the EU.

“It was completely inappropriate for businesses to be making these kinds of threats, for one simple reason. We are in a critical moment in the Brexit discussions. We need to get behind Theresa May to deliver the best possible Brexit, a clean Brexit.”

Mr Hunt’s comments were supported by leading Brexit enthusiast Liam Fox, the Secretary of State for International Trade, who also suggested that businesses warning the government based on their own detailed knowledge of the regulatory regimes under which they work were somehow placing the UK Government’s negotiating position – which is as yet both unknown and possibly undetermined – at risk.

The key economic issue for businesses is ensuring the sort of continuity in trading arrangements which secures jobs and encourages investment. Large businesses need a significant amount of time to make decisions on the allocation of resources, particularly in the face of unpredictable trade policy by twitter approach of the US Government. Short of certainty, and faced with a capricious transatlantic trading partner which scraps trade agreements and treaties at short or no notice, businesses are understandably twitchy about their inability to plan and the absence of meaningful interaction with them by the UK Government’s crack Brexit team.

In a carefully-phrased statement to MPs, Business Secretary Greg Clark told MPs: “Any company and any industry that supports the livelihoods of so many working people in this country is entitled to be listened to with respect.

“The government has been clear that we are determined to secure a deal with the EU that meets the needs of our aerospace firms and the thousands of people whose livelihoods depend on them.”

IRISH TRADE KEY FOR WEST WALES

Meanwhile, businesses have struck back at the apparent indifference of the UK Government’s key Brexit ministers to the interests of businesses which stand to be affected directly should the UK reach no regulatory deal – or a poor regulatory deal – with the EU.

Business groups the CBI, Chambers of Commerce, Federation of Small Business, the Employers’ Federation, and the Institute of Directors are placing pressure on the government to reach agreement on trade, customs, and immigration.

Pembrokeshire’s MPs, Simon Hart in Carmarthen West and South Pembrokeshire and Stephen Crabb in Preseli Pembrokeshire, are in an intriguing position over the issue of Irish trade.

With major ferry ports in Pembroke Dock and Fishguard, both Conservatives have a dog in the race to ensure that trade with the Republic of Ireland is at least maintained at current levels.

100,000 lorries were carried to Ireland via ports in Pembrokeshire in 2015. Any disruption of that trade, by the introduction of customs and immigration checks for example, would significantly reduce the attractiveness of west Wales’ ports to businesses trading with Ireland. That is not, however, a one way street. The Irish Government is also keen to maintain access to the UK as an access point to mainland Europe.

While the ports are not in themselves major employers, the ‘ripple effect’ of any loss or reduction in through traffic and any subsequent job losses could be significant. And concerns have been magnified by Stena’s decision to scrap a significant investment plan in Fishguard.

When we asked to respond to the Foreign Secretary’s views on the Irish Border issue and the importance of trade with Ireland to Pembrokeshire, Simon Hart said: “I have spoken (very informally) to [Boris Johnson] to make that point, which he says he recognises. The border issue might be minor in the overall context of Brexit but it is nonetheless very important.”

Stephen Crabb told us: “I have said right from the start that the issues over trade between the UK and Ireland, including the question of the Northern Ireland border, are some of the most complex and important of the Brexit negotiations.

“For us in Pembrokeshire it is important because of our trade links with Rosslare and I have raised this matter with Ministers in Ireland, the Cabinet in Westminster. The commitment that the Prime Minister has given that there will be no additional trade barriers for East-West trade between the UK and Ireland is crucial and reflects the points that I and others have been putting to her.”

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Lidl to build brand-new store in Llanelli

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LIDL has confirmed it intends to build a brand-new store in Llanelli as part of its ongoing £1.3bn investment across Great Britain in 2021 and 2022. The announcement comes as Lidl is working with developer Arbenigol Limited who has exchanged contracts with Carmarthenshire County Council, securing the site on Trostre Retail Park.

As well as delivering Lidl’s high quality and affordable produce to even more of the community, the plans include a multi-million-pound investment and the creation of around 40 new jobs for the local economy. The new store would consist of a 1,410m² sales an in-store bakery, customer toilets, baby changing and 130 car parking spaces. 

Lidl GB’s Regional Head of Property, Paul Hebblethwaite, commented: “We are delighted to confirm plans to open our second store for Llanelli and serve even more of the local community our fresh, quality, great value products. We are firmly committed to continuing to develop the local area through investment and job creation. The team are very much looking forward to confirming a date for our public consultation when we will outline our plans and get input from those who will directly benefit from the new store.”

Its ongoing success shows no signs of slowing, with the latest Kantar Worldpanel results highlighting Lidl’s increase in sales year on year and market share of 5.7%.

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Thousands of steel jobs at risk as lender collapses

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GREENSILL CAPITAL has this filed for administration, potentially putting at risk thousands of jobs in the UK steel industry, including jobs in Wales.

On Monday (Mar 8), lawyers for the bank, which is one of the main sources of funding for steel magnate Sanjeev Gupta’s business empire, appeared before a UK court today, the FT reported.

Unions are seeking urgent talks with steel magnate Sanjeev Gupta over the future of his operations in the UK with its main financial backer having now filed for administration in the UK.

Mr Gupta, who lives in Monmouthshire, has over the last few years acquired a string of steel and aluminium interests globally with the backing of supply chain lender Greensill, which is understood to have provided him £3bn.

According to court documents, Greensill has “fallen into severe financial distress” and can no longer pay off its debts.

As a result, US investor Apollo Global Management could now sweep in and buy up some of the firm’s businesses.

Accountants Grant Thornton said that it had been appointed as Greensill’s administrator.

In a statement, it added that in was in “continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets.”
“As these discussions remain ongoing, it would be inappropriate to comment further at this time.”, it added.

The collapse marks a rapid downfall for the firm, which counted former PM David Cameron among its advisers.

The supply chain finance specialist was thrown into disarray last week when its insurance provider refused to renew a $4.6bn contract.

Shortly thereafter, lender Credit Suisse froze $10bn of funds linked to the firm, leaving it perilously short of cash.

With Gupta’s GFG Alliance believed to be heavily exposed to the firm, the collapse could have a devastating affect on the UK steel industry.

Up to 5,000 jobs at GFG and subsidiary Liberty Steel could be at risk, with union officials set for crisis talks with the firm tomorrow.

“Sanjeev Gupta needs to tell us exactly what the administration means for Liberty’s UK businesses and how he plans to protect jobs”, union Community said in a statement.

“The future of Liberty’s strategic steel assets must be secured and we are ready to work with all stakeholders to find a solution.”

It was also reported that business secretary Kwasi Kwarteng met with Liberty Steel’s chief executive John Ferriman yesterday.

Nicknamed the “saviour of steel”, Gupta had previously snapped up a number of steel assets in the UK despite uncertainty over the future of the industry.

Liberty Steel currently owns nine steelworks sites in the UK, which employ around 3,000 people. 2,000 more staff work for engineering firms connected to the industry.

Reacting to the announcement of possible steel job losses at Liberty Steel, Newport and other sites, the Shadow Minister for Economy, Business and Infrastructure, Russell George MS, said: “This announcement, of course, will undoubtedly cause anxiety for workers and their families.
“So, first and foremost, the most important aim now is for dialogue to ensue, in a bid for a solution to be found.
“Steelworkers in Wales have a brilliant reputation for creating high-quality products and I truly hope a solution can be reached.”

But a spokesperson for the company said that the firm was currently running as normal.
“Our operations are running as normal and our core businesses continue to benefit from strong market conditions generating robust sales and cash flows”, they said.
“Our operational efficiency programme has improved profitability and we are making progress in our discussions with financial institutions that can help diversify our funding. We are keeping our employees up to date and will provide further updates as we deliver our plans.”

Mike Hill, Labour MP fo Hartlepool, where one of Liberty’s steelworks is, said: “Liberty Steel is a major employer in Hartlepool, manufacturing bespoke Pipes for use by the offshore oil and gas industry.
“The company has also been identified as a key player in the Government’s plan for a Freeport in Teesside and Hartlepool. The last thing our local economy needs in these difficult times is for the business to go under and urgent intervention from Ministers will be needed if there are any signs of that happening.”

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Burry Port residents urged to pool ultrafast broadband vouchers

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OPENREACH is asking people living in Burry Port to get behind a push for faster broadband.

Ultrafast, ultra-reliable full fibre broadband is within touching distance for people living in Burry Port – thanks to Openreach’s Community Fibre Partnership scheme.

The company – the UK’s largest broadband network used by customers of BT, Plusnet, Sky, TalkTalk, Vodafone and Zen – is urging people living or working in Burry Port to consider pooling Gigabit broadband vouchers available from the UK and Welsh Governments to help build a new, gigabit-capable network, where fibre is run directly from the exchange all the way to each property.

Many residents have already pledged their support, but those who haven’t and don’t currently have access to a 100Mbps broadband service can check if they qualify and pledge their voucher on the Connect My Community website.

If enough people come forward to pledge, and validate their vouchers – before the scheme ends – Openreach can work with the community to build a customised, co-funded network and bring full fibre broadband to areas not included in any existing private or publicly subsidised upgrade schemes.

By working with Openreach in this way, more than 150,000 homes and businesses across the UK can already benefit from ultrafast, ultra-reliable broadband.

Connie Dixon, Openreach’s partnership director for Wales, said: “This is a really exciting opportunity for the community of Burry Port to bring full fibre infrastructure to the town but the clock is ticking.”

“Deadline for vouchers to be pledged and issued is the end of March so we need as many people as possible in Burry Port to get involved so that we get enough pledges ‘over the line’. Everyone who pledges a voucher will be doing their bit to help make Burry Port one of the best-connected places in Wales. Pledging couldn’t be simpler, but we need residents to act quickly.”

Connie added: “Thousands of homes and businesses across Wales can already upgrade to the Openreach full fibre network and local people can use our online postcode checker to see what’s now available.

“We’re investing £12 billion to build full fibre broadband to 20 million homes – and more than three million of those will be in the toughest third of the UK – but we can’t upgrade the whole country alone. This latest support from government, alongside help to remove red tape and barriers that slow down the build, is vital.”

To claim vouchers which contribute towards the cost of building the new network, residents are asked to commit to ordering a full fibre service from a provider of their choice for at least 12 months once the new network is available.

Eligible residents can qualify for up to a maximum of £3,000 while small to medium sized businesses can claim up to £7,000 under the UK Government’s Gigabit Broadband Voucher Scheme which has been topped up by Welsh Government funding.

Carmarthenshire County Council leader, Cllr Emlyn Dole said: “We welcome this scheme and would strongly recommend residents and businesses in Burry Port seeking ultra-fast, ultra-reliable internet speeds to register their interest now. Fast, reliable connectivity is vital to support business growth, help communities to thrive, improve health and well-being, and make it easier for people to get online and access public services. This has been particularly highlighted during the current Covid-19 pandemic.”

Full fibre technology provides more reliable, resilient and future-proof connectivity; meaning fewer faults; more predictable, consistent speeds and enough capacity to easily meet growing data demands. It’s also future-proof, which means it will serve generations to come and won’t need to be upgraded for decades.

Fibre optics – strands of glass around one-tenth the thickness of a human hair – transmit data using light signals. Fibre is smaller, lighter and more durable than copper cabling and less vulnerable to damage. This short video explains what full fibre technology is and there’s more info here.

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