Friday, 19 July 2019

Sort out Brexit, say Henley businesses

Sort out Brexit, say businesses

BUSINESSES in the Henley area say the uncertainty surrounding Britain’s departure from the European Union is affecting them negatively.

Companies and owners say that with no withdrawal agreement in place as the official date of departure on March 29 approaches, they have had to make contingency plans.

Some say this is already costing them money and at least one company is considering leaving the country.

Giles English, who runs Henley luxury watch company Bremont with his brother Nick, said: “It’s slowing down the whole retail sector. It’s as much about indecision as anything else.

“We need to get out of it as soon as possible so people can feel comfortable in their jobs and businesses and grow them.

“Luckily, we have got a global audience for our products and are not just relying on the UK. If you are slightly worried about your business is it going to put you off buying a £5,000 watch? We haven’t seen a marked slowdown but December and January were slightly subdued.

“We have a place in Ruscombe and are building a new place in Henley. We want to become less dependent on importing goods.

“We are holding a little bit more stock than usual in preparation for that and being less reliant on global currency.”

MMS Marketing in Queen Street, Henley, which has clients in the UK and abroad, is considering moving the headquarters of the business to elsewhere in Europe.

Managing director James Munn said: “As it is for many businesses, Brexit is a huge concern for us — a concern compounded by the fact that we still don’t know what’s happening!

“I would not wish to comment on the outcome of the referendum as that is of little consequence to our business now. What is important to us is what happens next.

“It is utter madness that Parliament voted by a margin of something like six to one to hold the referendum. There was then a huge majority in Parliament to trigger Article 50. And yet when it comes to implementation, Parliament has been incapable of doing so as too many individuals have been, and still are, seeking personal or political agendas.

“It is a disgrace that so many businesses, including ourselves, have been left in limbo while the squabbling continues.

“Consequently, we’re having to consider the outcome of any and every eventuality.

“We’ve investigated the possibility of moving our head office and the company to within the EU.

“On a more day-to-day basis, we commission manufacturing in the UK for export to Europe and vice-versa. It may be that we will have to restrict manufacturing to within the markets, i.e. UK manufacturing for UK requirements and European manufacturing for the EU.

“Clearly this could reduce flexibility in what we do for our clients which is of great concern.

“All of our concerns are surrounded and caused by uncertainty. It is a disgrace that our Members of Parliament do not recognise that their duty should be to UK people and UK businesses, not to their own personal or political ambitions.”

John Board, dean of Henley Business School, said: “There are two big things for us to worry about. The first is the effect on staff and the second is the effect on students and therefore revenue.

“We are long-established and have a pretty strong international reputation with a lot of campuses overseas. We already have three venues in Europe, so we are not in the position of some firms having to rush abroad to get over that regulatory hurdle.

“Clearly there will be an effect and the Dutch Government has now told 18-year-olds not to study in the UK.

“It’s not so much about what it’s going to do for the EU 27 but for places like China and South America. Brexit is bad for the UK brand and that’s the part that really worries me.

“As far as staff are concerned, we aren’t seeing a big exit and we have had several staff members taking UK nationality. The big effect has yet to hit us and the number of European staff is modest.

“We are downgrading expectations and we are expecting a decline in student registrations. Most people register in September and October and last time we saw a bit of a drop but nothing major. We expect to see a much bigger one this time round depending on the outcome. We are expecting a financial hit.

“Where we are really putting in effort is switching from medium-sized venues in places like Munich to having a campus. That’s the main preparation.

“The second one is managing the budget more effectively. One wishes someone would decide something. A hard Brexit would be catastrophic.

“The other part of this is if there’s Brexit there is likely to be a big economic downturn in the UK. Firms will spend less on training senior people and the number of 18-year-olds planning to go to university rather than work will drop as well.”

Andrew Ingram, who runs the Tree Barn in Christmas Common, says Brexit could result in a loss of seasonal workers from Eastern Europe who travel to the country each year to help him harvest his trees in the build-up to Christmas.

He said: “At the moment we just don’t know but my main concern is that I normally have six or seven boys from the Czech Republic who come and work for me at harvest time.

“My feeling is the whole of UK agriculture would grind to a halt without those seasonal workers, not just for Christmas trees but all the salad crops, strawberry picking and others which at the moment is supplied almost exclusively by Eastern European labour.

“My wife has a major business importing Christmas decorations and we are not entirely sure what will happen with tariffs or how a no deal would affect us.

“We are sitting tight and seeing what happens over the next couple of months. If, for whatever reason, there is no probability of getting my seasonal workers in, the situation would become pretty serious.”

Mr Ingram said he believed an agreement would be reached to allow workers to travel to the UK as failure to do so could ruin the agricultural industry.

He said: “I can’t believe the Government would allow us to get into a situation where we can’t get seasonal workers and there wouldn’t be some arrangement for them to come in on a temporary licence for six to 10 weeks.

“It’s very early days. I would have to do something if the Government doesn’t make any arrangement but I’m not going to waste my time at this moment if we don’t know what’s going to happen.”

Jan Mirkowski, who runs Fairmile Vineyard in Henley, said: “The main challenge is labour. At certain times of the year we buy in specialist labour from a company in Kent and a lot of the labourers are Eastern European.

“We have seen fewer people coming from Eastern Europe and I think that will continue. They are falling because they are uncertain and unsettled.

“Last harvest we had a bumper crop and there just wasn’t enough labour to go round. We had to call on the good people of Henley, who did a great job. That will be my back-up plan if we don’t have enough specialist labour.

“The only other thing I’m thinking is if import tariffs go up it could become more expensive. You might see fizz from Europe become more expensive but that’s to my advantage.

“Brexit is a concern but when you run a business there are always concerns. It’s just one of the things in the back of my mind.”

Nick Warner, a partner at Knight Frank estate agents in Thames Side, Henley, said house sales had been affected by Brexit, especially in the higher price ranges of more than £1.5 million.

He said: “It has definitely created uncertainty. Part of our marketplace is aspirational, which really does not thrive off uncertainty.

“The core housing stock we deal with is valued between £500,000 and £1.5 million and tends to be more needs-based purchasing rather than aspirational and is less affected but nevertheless an impact is felt.

“The overall impact of all this uncertainty is that it doesn’t create any feelgood for anybody and impacts on the desire to spend or make major lifestyle changes.

“This has resulted in us doing less business than we might usually do in a more stable climate. We just have to be prudent with our business management.

“We are just yearning for clarity. People want to get on with their lives and make changes that in the last one to three years they haven’t felt able to.”

Mr Warner said changes to stamp duty, including a higher charge for foreign buyers, had also had an effect and the more stringent financial checks on those buyers made it more attractive for them to look for “trophy assets” or property in other European countries that might demand less restriction.

Stephen Christie-Miller, head of residential sales at estate agent Savills’ Henley office, was more optimistic.

He said: “The Brexit factor is an issue, it has slowed things down. It’s all about realistic pricing really.

“It’s steady as she goes and once we get to April, if a deal is done, then it will be a bit of catch-up and people moving on with their lives.

“Whatever happens on March 29, it is what it is and we have to be here ready and open for business with whatever stock we have. Right now is the most uncertainty but we are still agreeing sales.”

Gary Reynolds, chief investment officer at Courtiers Investment Services in Hart Street, Henley, said he was unsure how Brexit would affect financial markets and exchange rates and couldn’t predict how strong the pound would be after Britain left the EU.

He said: “Brexit has made it very difficult to manage portfolios and the pound has become volatile. That’s a nightmare on currency management.

“On the day we voted out we bought a lot of sterling. We thought we would remain but bet against that outcome and we made a lot of money.

“Subsequently it has been difficult to see where this might go. Although we expected it to be messy we are surprised by how messy it is. That has made managing money quite difficult.

“The outcomes are quite different depending on whether we are out with a free trade agreement or not.

“If you think it’s going to be okay and the UK economy is not going to get a whack, buying small stocks more reliant on the UK economy is good.

“If you think it’s going to be messy you want to be in big FTSE 100 companies. If you are a business exporting to the continent or in Northern Ireland it must be hell.”

Mr Reynolds said that despite the uncertainty, the business was still performing well.

He said: “We haven’t seen a downturn in business; it has been quite good for us. We are fortunate in the type of business we have.

“Our clients all want to make sure we have got contingency plans in place and they are going to be able to buy European stocks after March 29.

“Clients are very nervous about buying in sterling. We are having more foreign currency assets but we’ve been doing that for nearly three years, since before the vote.

“We have options that protect against a messy outcome, things like foreign currency, but if you are holding a lot of dollars and there’s not a messy outcome the pound will shoot up and we are effectively losing money.

“This has been quite a difficult tightrope to tread. A strong pound will hurt foreign currency but if we don’t hold foreign currency and there’s a messy outcome we won’t get the benefit of a diminished pound.”

Niki Schäfer, head of the Henley Business Partnership and an interior designers, said many of her suppliers had been affected by Brexit, which meant it was harder and took longer to source materials from abroad.

She said: “My business on the whole is very small so I’ve had mixed experiences.

“Some of my suppliers are closing down. They haven’t cited Brexit per se but they are all importers and small family businesses so the idea of dealing with that type of paperwork is too much for them.

“I’m nervous about all the bureaucracy and time it will take for my furniture and materials to come from abroad but it’s not going to impact me directly, just the schedule and cost.”

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