Chamber News

• February 2012 retail sales volumes: down 0.8% on the month, up 1.0% on the year

Commenting on the retail sales figures for February 2012 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“A fall in sales in February was widely expected following the relatively strong figures seen in December and January. The poor weather in the first week of the month could have hindered the retail market, so these figures should not cause undue concern. Longer-term comparisons show that while the growth in sales remains in positive territory, the pace of expansion is modest. The value of sales has risen by more than 3% over the past year, which is mainly due to inflation. If hikes in energy and food prices persist, this could create new obstacles to a sustained recovery in retail trade and in consumer spending in general.

“While there were some measures to support growth announced in the Budget, more must be done. It is important that retail sales continue to grow over the next year, but we cannot rely on consumer spending if we are to secure long-term growth in the economy. Increasing net exports and business investment remain crucial to driving the recovery in the months and years ahead. While sticking to its deficit reduction plan, the government will have to do more to reallocate priorities within the overall spending envelope.”

The Chancellor’s Budget could never have satisfied everyone. While the accelerated reduction in Corporation Tax, as well as the continued commitment to deficit reduction, are both reasons for businesses to be cheerful, we are disappointed that action was not taken today to prevent the coming ‘Great Business Rates Robbery’, nor the lack of action to boost investment and employment by SMEs in the real economy.

Here at the Chamber, we can’t help but feel that the Chancellor could have done more to help the small- and medium-sized companies that are at the heart of local economies up and down the UK. Corporation Tax reductions are undeniably positive, but benefit biggest companies the most. Changes to tax rules may help three million companies, but these are the tiniest in the land, with turnover of under £77,000 per annum.

We can be heartened by a number of the Chancellor’s decisions, including commitments to deliver planning reform, to finally getting on with Tax Increment Financing, to incentives for Enterprise Areas in Scotland and Wales, and to devolving decisions on Air Passenger Duty to the Northern Ireland Assembly. Yet I was hoping for more radical steps to support the solid-citizen employers in cities and towns up and down the land who have kept this country afloat during a period of protracted economic uncertainty.

Detailed grid of policy changes and commitments click here

Australia recorded a seasonally-adjusted trade deficit of A$673 million in January 2012, the first monthly deficit since February 2011, according to figures released by the Australian Bureau of Statistics.

Exports of metal ores and minerals fell 15 per cent, or A$1.1 billion. This was in part caused by cyclone Heidi, which prevented companies like Rio Tinto and Fortescue Metals loading ships in Port Hedland in Western Australia.

Non-monetary gold, exports of which fell 56 per cent, or another A$1.1 billion, is a volatile item whose shipment mostly depends on the Perth Mint. It imports, refines and exports large quantities of gold, often in different months.

Services trade, however, contributed positively to January’s trade balance. Services exports rose 3 per cent for the month, with travel up 4 per cent and other services – mainly business – up 3 per cent. Services imports rose 2 per cent.

Manufacturing exports were also up, by 5 per cent, with transport equipment shipments ahead 29 per cent.

Weaker demand in Asia was reflected by a 17 per cent drop in exports to Japan, and a 28 per cent decrease in exports to ASEAN economies. Exports to China fell 23 per cent to A$5.2 billion, in part reflecting lower economic activity during the Lunar New Year holiday in January. However, there was continuing growth in exports to India, up 7 per cent in January.

Imports of intermediate and other merchandise goods fell 5 per cent, while capital goods dropped 1 per cent. There was an increase in imports of consumption goods – up 3 per cent – and non-monetary gold, up 6 per cent.

If you went to Germany on a business trip or exhibited at a German trade fair in 2011, you can potentially save approximately 16 percent of your business expenses by claiming back the German VAT you incurred during the trip.

Since 2010, British businesses can submit their claims via an online system with HM Revenue and Customs (HMRC). Applications can be filed directly via standardised forms and, in most cases, original invoices will not have to be provided. Claims for 2011 have to be submitted to HMRC by 30 September 2012.

VAT may be claimed back on many products and services, such as hotel accommodation, training courses, expenses for conferences and exhibitions, meals and beverages, car rental and car fuel, parking, public transport and taxi fares.

In order to qualify for the refund procedure, you must not be resident in Germany, or have a place of business or domicile in Germany, nor own property or maintain a branch in Germany.

Angelika Baumgarte, Deputy Director General of the German-British Chamber, explains: ‘The online procedure makes it easier for British companies to file their claims for refund of German VAT. However, the claims will still be dealt with by the German tax authorities. Therefore, any requests regarding further information and all correspondence will be in German.’

More information on reclaiming your German VAT can be obtained from the Tax Services Department of the German-British Chamber of Industry & Commerce. The staff can also carry out the whole application process on behalf of your company: from preparing your application, to filing it online and responding to enquiries of the German tax authorities in German.

Contact them on 020 7976 4160 or email [email protected]

It’s that time of year again when the Arab Embassies review their legalisation costs so if there are to be any changes, they normally come into force from 1st April.

If you are looking to ship goods to any of the Arab League countries and will require legalised paperwork, please ensure that you check with us exactly what the costs will be.

For more information, please contact the International Trade Team on 01603 729712 or [email protected]

A new version of the Export Control Organisation’s current Training Bulletin is now available.

The Bulletin includes details of all forthcoming ECO seminars and workshops taking place from March to September 2012 (along with an attached course booking form at the bottom of the bulletin). Courses are scheduled to be held during the next few months in Southampton, Leeds, Birmingham, Glasgow and Aberdeen.

These courses are all designed to increase your understanding of UK strategic export controls and what your responsibilities are when exporting controlled items. All courses are delivered by UK government experts working within the UK’s Export Licensing Community.

Details are also provided about the option of on-site bespoke company training.

View the Export Control Training Bulletin 7 here.

With some of them having avoided the worst of the economic crisis, the countries of Central and Eastern Europe (CEE) hold considerable potential for UK exporters, according to UK Trade and Investment (UKTI).

Over the last 10 years, UK exports of goods and services to the region have more than doubled, from £6 billion in 2000 to £14 billion in 2010. The UK’s business with the region continues to hold up strongly, despite ongoing instability in the eurozone, with exports of goods to Eastern Europe up by 33% over 2011.

A busy programme of events over the year can be tracked by way of UKTI’s forward calendar, which offers opportunities to engage with expert sources of information and advice both in the UK and overseas.

On 29 March, for example, the London Chamber of Commerce and Industry will host “Doing Business in the CEE – an overview of regional export opportunities” while, on the next day, British Water will present “Water and environment sector opportunities in the CEE”.

Ambassadors from across the CEE region will return to the UK at the beginning of May with a business briefing/networking event, to be announced shortly, and the Lord Mayor of London will be taking a City of London delegation to Croatia and Slovenia in June.

EU Trade Commissioner Karel De Gucht has been in Moldova and Georgia this week to launch negotiations on establishing what he called Deep and Comprehensive Free Trade Areas (DCFTAs) between the EU and the two countries.

“I am confident that these negotiations will move ahead swiftly and pave the way to closer economic ties with the EU,” the Commissioner said. “The opening of negotiations confirms the EU’s commitment to deepen progressive economic integration and political association with our Eastern Partners.”

The Commissioner’s visit takes place ahead of the first negotiation rounds scheduled for 19-23 March (Moldova) and 26-30 March 2012 (Georgia).

The DCFTAs will be part of the Association Agreements currently being negotiated with Georgia and Moldova, which have the overall objective of significantly deepening political association and economic integration with these Eastern Partner countries.

They are very ambitious in nature, aiming to tackle trade obstacles at the borders and eliminating those behind the border. One objective is to bring legislation of its trade partners closer together with EU legislation in trade-related areas (this is the “deep” part of the deal).

In addition, the scope of the agreements is very broad, addressing matters that are considered fundamental to a modern, transparent and predictable trade and investment regime, such as competition, government procurement and intellectual property rights (hence “comprehensive”).

Both countries currently enjoy preferential access to the EU market through the autonomous lower import duties of the Generalised System of Preferences, with further incentives for good governance (GSP+ for Georgia) and Autonomous Trade Preferences (Moldova).

The future trade agreements will extend significantly beyond the scope of current co-operation, governed by the Partnership and Cooperation Agreements, in force since July 1998 (Moldova) and July 1999 (Georgia).

Progress achieved in dismantling barriers to the markets of six strategic economic partners – China, India, Japan, the Mercosur, Russia and the USA – has been described in a new report by the European Commission.

The second Trade and Investment Barriers Report highlights some success stories in the removal of certain trade barriers, such as in India, but also underlines the overall persistence of barriers for European business to access these key markets.

Dismantling these barriers would improve and open up new export and investment opportunities for European companies and people, the Commission argues.

“With protectionism an ever-present threat, we need to make sure that trade remains open in order to boost jobs and growth,” EU Trade Commissioner Karel De Gucht explained. “Today’s report shows that our enforcement strategy is paying off in fighting unfair barriers to trade and investment; yet, we need to strengthen our vigilance and double our efforts in order to make sure that openness is maintained worldwide.”

The latest report assesses the progress achieved on the 21 barriers that were identified in 2011 in the first edition.

It also identifies six new priorities: in China, the national security review mechanism for mergers and acquisitions involving foreign investors and export financing and subsidies; in India, the National Manufacturing Policy; in Brazil, the tax on industrial products (IPI) and import procedures for textiles and clothing; and in Argentina, the restrictions on reinsurance services.

The Trade and Investment Barriers Report is part of a broader enforcement strategy that aims to ensure that the EU’s trade partners abide by their commitments and maintain open markets.

The purpose of the report is to focus attention on efforts needed – including at the highest political level – to ensure market access for European companies in these important markets.

Click here for the full report.

HMRC plans to implement a change on 1 April 2012, bringing forward the due date for the submission of Intra-Community Trade Statistics (Intrastat) to the 21st day of the month following the month in which the trade occurred, eg data for April 2012 should reach HMRC by 21 May 2012.

Successive supplementary declarations will then need to reach HMRC by the 21st of the following month, or the last working day before then.

The South East was the UK’s biggest exporting region in 2011, with figures for that year hitting a record £42.8 billion, according to the latest Regional Trade Statistics from HM Revenue and Customs (HMRC).

A decline in export growth in the fourth quarter (Q4) meant however that the region recorded only 1.9% growth in 2011, enough to beat the 2010 record but the smallest increase of all the UK regions.

Lewis Scott, Regional Director for UK Trade and Investment (UKTI) South East, said that local firms need to rise to the exporting challenge if the region and the wider UK is to grow.

The latest figures show that the EU remains the most important export market for the South East, with a 12-month export value of £19.1 billion, followed by North America, Asia, the Middle East and North Africa.

Mr Scott said that UKTI could help firms to explore these markets by offering free one-to-one advice and support.

“We have just announced the winner of our Export for Growth prize, Crawley airport ground handling experts, Avtura Ltd,” he continued. “The high standard shown by the winner and the standard of entries in general demonstrates that there is a huge amount of creativity and innovation in the region.”

He called on other small and medium-sized firms to rise to the challenge to “Sell British” and to exploit the opportunities available to them.

A new Transatlantic service made its first call at Britain’s largest container port, Felixstowe, earlier this month as part of a link between northern Europe, the UK, a selection of US East Coast ports and Panama.

Operated by The New World Alliance Lines, the Americas Europe Express (AEE) service is the Alliance’s third transatlantic route complementing the two existing weekly services that also call at Felixstowe.

The service offers shippers competitive Westbound transit times (of eight days) between Felixstowe and New York.

The AEE service rotation is: Manzanillo (Panama), Charleston (USA), New York (USA), Rotterdam (Netherlands), Bremerhaven (Germany), Felixstowe (UK), New York (USA), Charleston (USA) and Manzanillo (Panama).

The Alliance of APL, Mitsui OSK Lines and Hyundai Merchant Marine (HMM) has deployed high-reefer-capacity ships on the weekly service with an average effective capacity of 3200 TEU (20-foot equivalent units, the standard measure of containers).

APL will supply three of the vessels deployed and HMM and MOL will contribute one each. As with the Alliance’s APX service that already calls at Felixstowe, Maersk Line will take slots.

The first Eastbound vessel is expected to arrive at the Suffolk port on 24 March.