11 minute read
Preparing for Brexit
Dundee & Angus Chamber of Commerce has been working hard to help businesses prepare for Brexit.
Developing robust resilience against national and international issues, which of course effect businesses but should not derail them or cause us to pause in fear of the unknown.
We ran a series of events earlier this year and have been promoting the large array of information that can help businesses uncover how Brexit might impact them. Our International Trade Team can help with any questions you might have; we can also signpost to partners and other areas of business support, plus tell you more about the Brexit Support Grant, so please get in touch with us to have that chat.
To help you consider some of those issues, we’ve asked two local business leaders to give us their take on matters and what may or may not happen as we move through a General Election and into the run up to the next key Brexit date.
“Preparing for Brexit – focus on the “Known Knowns”!
It may be over three years since the EU referendum, but the reality is that the majority of UK businesses are still not prepared for the impending departure from the European Community.
It’s not a matter of whether the decision is a good one or a poor one – that depends entirely upon your politics and your views on the world. The challenge facing businesses is in how they manage the transition from one stage to another.
Of course, there is doubt and uncertainty – after all, it’s the future!
In February 2002, Donald Rumsfeld, the then US Secretary of State for Defence, stated at a Defence Department briefing: “There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.”
And so it is with Brexit:
The “Known Knowns” are straightforward. As a Member State of the European Community we have trade rights within the EC. Once we leave, we will lose these rights. We may negotiate a replacement set of conditions in the fullness of time, but that is unlikely to happen “overnight”.
Whilst there may be “transition arrangements” in place – depending on whether or not we leave with a deal – we must consider the worst case. For example, sales to the EC countries are only classed as “transfers” currently, there is no barrier to the movement of goods and services. Post-Brexit, these will be exports, and imports for your clients, and will require Customs declarations at both sides of the transaction.
The UK Government has said it will waive duties on around 85% of imports; there has been no offer of reciprocation from the EC. This means that exports to these countries post-Brexit will be subject to EC import tariffs.
We will resort to the World Trade Organisation (WTO) “most favoured nation” terms – the default position for trade not otherwise covered. They may not be ideal, but they are known, and we can plan for them.
All will involve additional costs - are you going to absorb this or hope that your customers will accept a price increase? Or are there other steps you can take to minimise the impact? Have you asked for help?
The “Known Unknowns” are a bit more difficult – we will have trade deals post Brexit. There are some agreed in principal, awaiting ratification once we leave the EC. Others will follow, in the fullness of time. We can expect some economic fallout from Brexit – the view of most economists seems to indicate a downturn in output, with the only uncertainties being the level of impact and the duration.
The “Unknown Unknowns” are the most difficult: and for these we have no clue!
So, what to do?
Focus on the “Known Knowns” – consider the practical steps that you can take, and don’t sweat about the Unknown Unknowns (for now). Help is available.
Check out the Prepare for Brexit website (https://www. prepareforbrexit.scot) and see what you can do now.
Jeff Lockhart, a Director of St Andrews Management Centre, is an international consultant and leadership trainer. Jeff has worked with the Chambers of Commerce in Dundee & Angus, Fife and Aberdeen in the delivery of International Trade workshops and has worked with a number of Scottish businesses on their Brexit preparations.
“the uk government has said it will waive duties on around 85% of imports, there has been no offer of reciprocation from the ec.”
why all businesses need to fully understand their supply chain
Don’t just think that contingency planning for Brexit applies only to large businesses. All businesses should aim to be fully aware of how Brexit could affect their supply chain and their customers. Every business, no matter how small, should complete a full audit of its supply chain.
A second Brexit deadline has come and gone, without any reduction in the uncertainty facing business owners. The next key event will be the general election on 12th December and only after the results of that are known will we be any clearer about how the Brexit process could play out.
One possibility is that the Conservatives win the election with a majority large enough to allow the new government to get Boris Johnson’s Withdrawal Agreement passed as law, facilitating the UK’s departure from the EU by 31st January 2020.
But that is far from the end of the Brexit process. It would only move the UK into the ‘transition phase’ during which the allimportant trade deal discussions will take place. This phase is currently scheduled to end on 31st December 2020, leaving very little time for some very complex negotiations. And, if no agreement can be reached in time, the UK will again face the risk of falling out of the EU without a deal. The government can ask for an extension to the transition period, but current rules say this must be done by July 2020.
A ‘no deal’ outcome could also arise, and even sooner, if there is no clear winner of the election, no relevant legislation can be passed through Parliament successfully, and if Europe refuses to give the UK a further extension. In this case the UK could leave the EU at the end of January 2020 without a deal.
Given the risk of ‘no deal’ still being on the table, several high profile companies have announced plans to protect themselves; including stockpiling, plant closures, relocations and delays to investment plans. Unfortunately, smaller companies appear to have been much slower to act. So what could a ‘no deal’ scenario mean for your business? Are you fully aware of the potential implications for your input prices, output potential and profits, or are you simply waiting to see what happens?
Although a ‘no deal’ outcome might offer good opportunities to some businesses, for others the impact on supply chains could present a major challenge. If uncertainty is high, Sterling could fall in value, pushing import prices higher, raising costs and putting downward pressure on profit margins. We have also been warned that there could be some short-term disruptions and significant changes to trade, including delays and temporary shortages.
Every business, no matter how small, should complete a full audit of its supply chain, to get a much better understanding of where its own supplies are sourced, and the inputs of its suppliers. This process will highlight any exchange rate sensitivity and the challenges which could arise if we experience any disruptions or delays.
Once businesses have all the information they need, formulating contingency plans to mitigate risks becomes a much easier process.
Shona Dobbie, Angus Economics Want to find out more about the potential impact of Brexit on your business or sector? contact@anguseconomics.co.uk
“a no deal outcome could also arise, and even sooner, if there is no clear winner of the election...”
Charity trustees: doing the right thing
Scotland has over 180,000 charity trustees, and it’s interesting, rewarding work. The groups they help range from sports clubs and Scout packs to nationallyknown charities. Their work is rightly praised, but many feel under fire – criticised for not being diverse enough, young enough, or savvy enough about the latest risks facing their charities. There’s also a risk that other people are deterred from becoming trustees by fear of what it involves. The way to tackle both issues is to provide trustees with effective training. The need to support trustees is especially relevant for charities trying to diversify their boards. Even among the more traditional trustee base, there’s much to learn. Marjory Rodger, a trustee of Social Bite said: “Many of our trustees and directors have significant privatesector expertise but there are important variations in priorities and nuance when it comes to governance of charities.” So, what to do? As a starting point, OSCR has excellent guidance for trustees on its website, at www.oscr.org.uk. Being a charity trustee is a great way to feel good as well as do good. But to perform their roles effectively, trustees need the right help and support The Scottish Council for Voluntary Organisations (SCVO, at scvo.org.uk) also provides excellent information for new and existing trustees. However, the OSCR and SCVO information is general, and chairs and trustees usually also want guidance tailored to their own charity. Typical issues on their agenda include: • trustees’ financial responsibility and personal liability • • risk management and reporting • handling disputes and whistleblowing • how to embed effective decision-making processes and diversity on the board. Without understanding these issues, charities and their trustees may face reputational and financial risks; equally, if charities don’t help their trustees get to grips with them, they may struggle to recruit an effective board. Trustee training does not have to be a huge time commitment for the charity or its trustees. Training can take as little as a day or half day, even as part of a board strategy day. Many of the team here at Lindsays are charity trustees themselves, and we heartily recommend it as a way to support causes close to your heart. With some basic training as well, you can make sure you’re performing your role as effectively as possible. Want to find out more? Lindsays provides trustee training to charities of all sizes. If you would like information about training tailored to suit your organisation’s needs, simply give us a call. “Social Bite has always tried to do things differently and we’ve grown very quickly. For that reason, it’s important our trustees are surefooted about their legal obligations and about governance arrangements. Trustee training has been a great help with that.”
Josh Littlejohn, Trustee and Co-founder, Social Bite and The World’s Big Sleep Out
Dundee | Edinburgh | Glasgow Alastair Keatinge | Partner, Head of Charities and the Third Sector alastairkeatinge@lindsays.co.uk 0131 656 5746 David Dunsire | Consultant, Charities and the Third Sector daviddunsire@lindsays.co.uk 0131 656 5654
ITWORX are on track to achieve their strongest year to date. In today’s fast paced and ever-changing IT Industry, building a strong and dynamic team has been at the forefront of the company growth strategy. Investing in local talent continues to be a core focus with 4 new roles implemented in 2019.
Developing and retaining talent has played a critical part in the success of the business. Investment in training and staff development has been a key contributing factor in maintaining the competency and expertise within the team, with engineers certified to Cisco Certified Network Professional (CCNP) and Microsoft Certified Solutions Associate (MCSA). The Services Team continue to go from strength to strength with a total of 8 industry accredited exams passed this year across the team. These include Cisco, Meraki and Microsoft accreditations. Services Team Leaders Stuart Bowlerwell and Martin Kerrigan commented: “We are delighted with how the engineering team have continued to develop throughout the year. Our high customer retention rate is testament to the hard work and commitment by all our engineers.” At the start of the year, ITWORX also engaged in the ScotGrad program resulting in the addition of a new Business Support Coordinator to the Commercial Team.
The ITWORX team.
SPONSORED CONTENT Director, Jill Ross commented: “Our company ethos has always been to “grow your own” and tap into the young talent coming out of College and University. We are extremely proud of everything the ITWORX team have achieved this year, and we look forward to building on this further as the company continues to expand and grow.” ITWORX are a leading IT and Communications Specialist headquartered in Aberdeen.
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