Will the UK mini budget kick start the stagnating business economy?

Against a backdrop of soaring company insolvencies, up by 72% in the last year according to the Insolvency Service, and plummeting business confidence the new UK Chancellor unveiled a package of measures to try to deal with the current cycle of stagnation and rising costs.

The focus, said Kwasi Kwarteng, would be on growth and the measures included reversing the rise in National Insurance payments, freezing corporation tax and cutting stamp duty.

The limit on bankers' bonuses was scrapped and there will possibly be 38 new investment zones in England.

This hugely expensive package is generally called trickle down economics, whereby the hope is that with more disposable income, investors and businesses will pass on the gains to those lower down the economy.

However, it is not a new idea and dates back to at least 1972, when a similar package ushered in several years of boom and bust.

Will it work this time?

Who can tell.

Certainly the stock markets and investors were not impressed and...

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There are opportunities in even the grimmest situations

business growth growth May 19, 2022

Research by the UK organisation Make UK has found that almost three quarters of UK manufacturers have reshored their supply chains as a result of the disruption caused by the Covid pandemic and more recently the war in Ukraine.

“Nearly half (42%) of manufacturers have increased the proportion of suppliers based in Great Britain, with further reshoring in the pipeline for over two-fifths of companies,” according to their report.

This, together with the change in consumer purchasing habits moving to more online shopping has dramatically increased the demand for warehouse space.

According to latest research by Colliers, industrial occupiers are in a race for space as the UK is experiencing the lowest level of supply ever recorded, with only 18.1 million sq ft left, due to demand for logistics units continuing to be driven by the structural change in consumer spending patterns.

Colliers states that take-up in 2021 for industrial distribution warehouses of 100,000 sq ft+...

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A new Industrial Revolution?

How feasible is it to reshore our industries?

The Office for National Statistics has reported that the UK has suffered “significant challenges when acquiring and maintaining their stock”.

Well, no surprise there as businesses have been well aware that a combination of Covid, Brexit, higher energy prices, events like the blockage of the Suez Canal and, of course, now Russia’s ongoing war in Ukraine has disrupted the global supply chain.

But this week the paper CityAM is asking whether now is the time to bring manufacturing industries back into the UK, aka “reshore” them to ensure not only supplies of essential but also growth.

While not underestimating the challenge, the paper points out that the UK “is still the ninth largest manufacturing country in the world, producing £183bn of products and employing 2.5m people”.

Reshoring, it argues, will have benefits, including reducing products’ carbon footprint, reducing lead times and...

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How does your supply chain stack up?

Materials, parts, products; they have all been subject to delays and shortages over the last year thanks to a combination of factors from a shortage of lorry drivers to the effects of pandemic lockdowns.

It has all made running a business more stressful and expensive.

Is it time to rethink your supply chain?

Many businesses switched to buying from suppliers further afield because of the financial savings this brought them, but perhaps given the more recent difficulties it might be worth looking for sources closer to home.

It may end up costing a little more but if it improves your business’ continuity it may be worth it.

Reshoring is also becoming increasingly important for improving UK manufacturing resilience and ensuring that its manufacturing supply chains are fit for an uncertain future.

Perhaps you need a back-up plan?

It is also worth looking around for alternative suppliers and using more than one, again to ensure the continuity of your own business operations.

Giving...

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Lessons and new opportunities from pandemic disruption

Business activity is starting to pick up after 18 months of disruption but what lessons have those that survived learned, what new opportunities has it brought and what new practices will businesses keep as a result?

Changes in customer and client needs?

A recently-reported development has been the numbers of staycation bookings for 2022 that are already being made after people decided to holiday in the UK in 2021 due to all the complex rules overseas travel and quarantine on return.

This presents an opportunity for the tourism industry to develop their attractions and offers, notwithstanding some of the difficulties there are in recruiting enough workers.

There may well be opportunities in other businesses in the wider economy to respond with new products and services based on what clients have asked for during the various stages of the pandemic.

Changes in ways of working

While some businesses needed to furlough staff because of a drop in demand during the pandemic others changed...

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Directors should be mindful of future investment and changing values post pandemic

Businesses planning their post-pandemic strategy are likely to be seeking future investment to shore up their balance sheets but directors will need to be mindful of the changing values of stakeholders and in particular those of their customers who in turn are influencing investors.

Before the immense disruption caused globally by the onset of the pandemic, climate change, global warming and the need for a more sustainable form of economics were a major preoccupation.

That preoccupation has not gone away.

While physical attendance at a second summit on ethical finance by international delegates from Government officials, financial institutions, consumer goods corporations, supply chain intermediaries and conservation organisations planned for Edinburgh this month has had to be cancelled, it has now been replaced by a virtual summit.

And this month, the UK’s Investors Association published a paper on the future of investment in which it, too, identified the importance going...

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Directors should plan for innovative UK manufacturing to revive their businesses post-Coronavirus

UK manufacturing was in dire straits even at the onset of the Coronavirus lockdown, with the CBI (Confederation of British Industry) reporting output dropping at its fastest pace since 1975 in the first quarter of 2020.

As it progressed the pandemic and lockdown revealed many weaknesses in the global supply chain, most notably in the availability of PPE (Personal Protective Equipment) for frontline health and care workers.

However, it is often said that in disaster there are also opportunities and many businesses demonstrated their agility in switching their usual production to manufacturing both PPE and sanitising equipment, for example.

But, as attitudes change, so the opportunities for innovation increase and it is a good time for directors to start planning strategies for not only producing essential supply chain elements within the UK but also for devising new products to fit the new agendas.

The UK Government has announced two initiatives aimed to protect UK...

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Employing millennials should not be a problem

Employing millennials should not be seen as a problem but according to some reports in the business press many employers would prefer not to.

The reasons given range from this generation having a poorer grasp of language to being less loyal than older workers, and allegedly having higher absence rates.

Quite apart from the fact that age discrimination is outlawed under equal opportunities legislation, millennials (the generation born between 1980 and 2000) now make up the bulk of the workforce.

While it would be fair to say that employing millennials means bosses need to understand that this age group may view their careers rather differently from previous generations, it is also true that each generation comes with skills and attitudes that are a benefit to their employers. It is also true for many employers that they are customers who need to be understood.

Approximately 10 years ago PwC produced a report that focused on the millennial generation, examining their career...

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Why you should think 'Environment First' if you need an investor

The UK’s largest investors put environmental concerns and corporate governance issues as top of their lists when considering companies in which to invest, according to research by EY.

However, the respondents awarded a “could do better” to such areas as audit, corporate reporting, trust, and reputation, according to a report on the research published by CityAM.

Clearly the activities of campaigners like Greta Thunberg and Extinction Rebellion have significantly raised awareness on environmental issues.

But the profile of environmental concerns is also being raised by the annual world summits on ethical finance, the most recent of which was held in Edinburgh in early September and was attended by senior representatives from more than 200 companies and organisations.

The summit is organised by the Global Ethical Finance Initiative, which oversees, organises and coordinates a series of programmes to promote finance for positive change.

In early October, Mark...

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‘Caveat Emptor’ Is peer to peer lending too risky for peers?

Peer to peer lending (P2P) enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman.

As such, the lack of trust in middlemen has seen the emergence of peer to peer lending platforms as an attractive proposition for retail investors in a climate of low interest rates because they can offer better rates thanks to the lower overheads associated with online businesses. The lower overheads are also related to not having to pay a middleman!

The platforms are generally a website or app that facilitates this alternate method of financing, where the first emerged in 2005 and was brought under FCA (Financial Conduct Authority) regulation in 2014.

However, the FCA has been criticised as being too “light touch” in its oversight following the collapse in May this year of UK property finance peer to peer firm Lendy with £160m in outstanding loans of which it has been calculated more than £90m are in...

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