Round table: Investments on pause as businesses hold their breath

There are signs that companies in the East Midlands are becoming nervous because of the threat of a no-deal Brexit, according to panelists at our latest round table event.

Business leaders and a local MP gathered at Loughborough University to debate the way forward for importers in the region.

Opening the debate, Keith Ross, head of mid corporate for sponsors Barclays in the East Midlands, said: ““From September last year onwards we saw investments being put on pause. From the start of this year, we’ve seen that liquidity dry up as businesses absorb the cash to navigate their way through the Brexit process.”

Here’s what the rest of the panel had to say…

On changes to the importing process since the EU Referendum vote in June 2016…

Jonathan Wilbraham, Sleaford Quality Foods: “We’ve seen a shortage of drivers over the last three years. Those that have come from EU countries have largely returned, while some suppliers have extended their delivery times and we’ve had to pre-book transport. It’s been challenging and we feel ill-advised by the Government.”

Nicky Morgan MP: “There have been a lot of no-deal preparations, it’s just that perhaps these haven’t been explained well enough to businesses. The Government has published the tarriff schedule for the next 12 months, for example.”

Richard Blackmore, CBI: “Whether it’s the case or not, there’s a feeling among our members that the Government is nothing to help them. The information really needs to be getting out there if, like Nicky says, there is a lot going on in the background.”

Gary Lunt: “We deal with client who have very long lead times, and these have begun to fluctuate, which means that the buyer not get what they actually ordered.”

Andrew Durbin, Permaroof UK: “Simply getting the raw materials for our businesses is becoming a challenge, especially around costs. I really don’t feel that there information has been there for businesses around what to do post-Brexit.

Steve Digva, InPhase International: “The last two years have very difficult for my buisness. We’ve seen huge changes – the biggest of them being the change in the exchange rate. I think that whatever happens with Brexit now this problem will be here for at least five years.”

Phil Hall, Hallmark Consumer Services: “We’ve not really noticed cost pressures, although some companies we deal with are extending terms; the biggest concerns for the clients we deal with is terrorism.”

On the impact these challenges are bringing…

Shaun Revell, SR Timber: “We’re seeing competitors importing substandard, cheaper products into the UK because of cost pressures. This obviously has a knock-on effect on health and safety, but we’re seeing it gather pace because margins are now so tight.”

Nicky Morgan MP (foreground) listens to Jonathan Wilbraham, Andrew Durbin, Tina Dodsley and Gary Lunt

On financing import in a post-Brexit landscape…

Tina Dosley, Warren Board Sales: “Twelve months ago cash flow wasn’t a problem; now we have to keep checks on what’s coming in and going out on a daily basis, which can put a stop on investment.”

Paul McKenzie, ABL UK: “It’s these kind of decisions that can make of break a business. We’re ploughing 30% of revenue straight back into the business and are building up a war chest a quarter at a time.”

Richard Blackmore, Steve Digva and Keith Ross

Steve Digva: “We need more funders to come forward with a war chest who will do more for businesses and open up funding.”

Nicky Morgan: “Is this what Barclays is hearing? Are people taking steps to try and help businesses with finance?

Keith Ross: “We’ve been planning for both a deal and no-deal scenarios. We understand that businesses go through investment cycles and that all the paused investment will have to return if businesses are going to grow.

Paul McKenzie talks with Shaun Revell, Phil Hall, Richard Blackmore and Keith Ross listening on

Deal or no deal?

Phil Hall: “What’s the likelihood of a deal happening?”

Nicky Morgan: “The likelihood of a deal is quite high. The EU don’t want a no-deal scenario, but I don’t think the deal will be the Prime Minister’s. The EU has been pressurising the Labour Party to abstain in House of Commons votes.

“I think revoking Article 50 is a terrible idea – we’ll just has a re-run of the last three years. We need new leadership and a new strategy.”

Attendees:
Phil Hall, Hallmark Consumer Services
Jonathan Wilbraham, Sleaford Quality Foods
Paul McKenzie, ABL UK
Steve Digva, In Phase International
Andrew Durbin of Permaroof UK Ltd.
Tina Dodsley of Warren Board Sales Limited
Gary Lunt – Customer Attuned Limited
Keith Ross – Barclays
Nicky Morgan MP
Sam Metcalf, TheBusinessDesk.com
Richard Blackmore, CBI
Shaun Revell, SR Timber