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n International Trade - No shortage of trade issues in new PM’s in tray
NO SHORTAGE OF
TRADE ISSUES IN NEW PM’S IN TRAY
There is probably never an easy time to become Prime Minister. But for Liz Truss it is fair to say that with soaring inflation, a cost-of-living crisis and a potential trade war with the EU in the offing, this is a particularly challenging period to take the reins.
The prospect of a fully-fledged trade dispute between the UK and the EU is growing in likelihood. The Northern Ireland Protocol Bill has completed its Commons stages and has been introduced into the House of Lords.
Should the Bill become law, it would provide UK Ministers with the legal powers domestically to overwrite the NI Protocol and introduce check free, friction free movements of goods East-West and WestEast across the Irish Sea for Great Britain and Northern Ireland.
Though the implementation of the new law is still many months away - the EU may respond aggressively with further actions. This may include tariffs on selected UK exports to the EU while attempts to resolve the matter are undertaken by the dispute resolution machinery in the Withdrawal Agreement and Trade and Cooperation Agreement.
The British Chamber of Commerce is prioritising a negotiated solution but is advising potentially affected companies to take advice now to mitigate their exposure to new costs on exporting goods to the EU should matters worsen. It is still unclear how much willingness for compromise there is on the UK side (under the new PM) and from the EU. There is a danger that things could escalate, and that the EU might harden its line further but the noises coming from Ireland right now suggest constructive dialogue might begin soon.
Following Liz Truss’s leadership win, Irish foreign minister Simon Coveney struck a more hopeful note.
He told Irish broadcaster RTE recently: "I have to say I have some cautious optimism that we will see in a few weeks' time the opening of an honest effort to try to settle some of these issues that have been outstanding for far too long”. Watch this space.
India and Canada
Also, near the top of the in tray for the new Prime Minister, is an intensive series of non-EU trade negotiations.
Negotiations with India are expected to be completed in time for 24 October – and the BCC has had sight of some negotiating drafts in key areas.
Negotiations with Canada for a bespoke trade agreement are expected to conclude by the end of the year to tie-in with UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Negotiations with the Gulf Cooperation Council, Mexico and Israel will continue but may not conclude until into 2023.
Prime Minister Truss will also be expected to deliver a key export strategy which provides a pathway to stronger export-led growth.
The Office for Budget Responsibility forecast in last autumn’s Budget export growth between 8-9% this year. Trade data from the first half of this year puts UK export performance short of that growth trajectory. The BCC
TRADE ISSUES IN NEW
is putting plans to the Department for International Trade (DIT) to remedy that and boost export volumes.
Recruitment and training
Filling vacancies remain a major concern for UK businesses – whether their focus is on domestic or export trade.
The number of job vacancies in the economy remains around the highest on record and competition for skills and labour continues to drive up wage costs.
The Truss government is being urged to act quickly.
As BCC Head of People Policy, Jane Gratton, warns: “Skills and labour shortages have reached crisis points for many firms. The impact is being felt on their ability to meet customer demand and forcing some to turn away new business, because they simply do not have the human resource. This is restricting growth and business confidence. It is a serious and urgent problem”.
Gratton is calling for an immediate review and reform of the Shortage Occupations List (SOL) to include more jobs at all skill levels. This will give firms breathing space to train and upskill their workforce.
“We also need to encourage economically inactive people back into the UK labour market through access to publicly funded rapid retraining opportunities”.
She adds: “Businesses must be part of the solution too by creating the right workplace conditions, for example by providing flexible working practises, training opportunities and a focus on workplace healthcare and support.
“It’s time for action and we’re offering the solution. It’s time for the Government to listen.”
DELIVERING GROWTH
Thinking Business recently had the opportunity to sit down with Tony Watkins, Head of Development London & South East at Panattoni, and get an insight into why Europe’s largest industrial real estate developer is investing more than £180m in Kent.
Despite excellent motorway connections to the Channel ports and M25, Kent has a longstanding un-met need for high quality logistics and warehousing space. However, that’s changing, thanks in part to Panattoni’s arrival in the county. The company is transforming the 90-acre former Aylesford Newsprint site to create high-quality logistics and distribution space, employing more than 3,000 people. When fully completed in Q1 2024, the park will be the company’s largest UK investment, and part of its commitment to supporting its global clients and strengthening local employment. The first unit at the park will be operational from this month and be in full employment use ready for the Christmas peak. As a site, Aylesford offers the perfect location with motorway connections, existing access to the power network and a size to meet the exacting demands of the distribution and warehousing industry, without requiring development on greenfield land. The prospect of new jobs was welcomed by local residents, and its economic significance helped ensure the plans got the green light from Tonbridge and Malling Borough Council, and support from Kent County Council and Locate in Kent.
Demand-led development
Having marketed the site to the global logistics industry, Panattoni’s confidence was quickly rewarded with significant levels of demand from industry leaders wanting to secure operations in Kent.
Four occupiers have already been secured for the site near Junction 4 of the M20, including DHL, Fowler Welch, and Evri (formerly Hermes) and most recently Marley Tiles, with other deals close to being finalised. When it comes to demonstrating confidence, nothing speaks louder in the property industry than investing in speculative development. It’s a case of “If we build it, they will come” and that is exactly what Panattoni is doing here in Kent. The company is shortly to bring forward plans to speculatively create 750,000ft2 of highquality flexible warehousing space on the site. The aim is for the building to be operational, subject to planning, by the end of Q1, 2024.
Strengthening local supply chains
After being introduced by Tonbridge and Malling Borough Council, Panattoni signed up Royal British Legion Industries (RBLI) to supply the permanent estate signage and hoardings for the whole development site
RBLI’s social enterprise Britain’s Bravest Manufacturing Company employs more than 100 people – 70% of whom are veterans and people with disabilities. The partnership is one of those occasions when Panattoni has been able to source high quality, competitively priced products and also support the nation’s veterans with employment, training and accommodation.
Leading by example
The company is also delivering on its environmental commitments by exceeding its requirement to deliver a 10 per cent Biodiversity Net Gain onsite at Aylesford. It is also working closely with Kent Wildlife Trust to support a number of local environmental projects, including work on Ditton Stream. As part of its commitment to sustainable development, Panattoni will use low or Zero Carbon technologies to reduce energy demand and CO2 emissions at Aylesford. Solar panels, air source heat pumps and LED lighting will reduce energy consumption and associated CO2 emissions by at least 10 per cent. No gas will be used in its operation, and EV charging points for cars and bikes are being integrated. The whole park will be certified to the national environmental standards, with a BREEAM rating of Excellent and Energy Performance Certificate of A.
Wider benefits
As part of its Section 106 agreement, Panattoni is also funding the construction of a £7m road which will link Bellingham Way to Station Road to improve the local infrastructure and at the same time restrict HGV access to Aylesford village. When construction of the new link road is finished, it will be formally become part of KCC’s road network.
After listening to the local community and recognising the need to enhance local transport provision, Panattoni will fund an upgrade to the local bus service for five years, and contribute towards a cycle hire scheme. More than 4km of new cycle paths and footpaths will be put in place, as well as improvements to the New Hythe and Aylesford railway stations.
Continued investment
On an 8-acre site at Wrotham, Panattoni is proposing to develop a 58,000ft2 distribution centre, creating 250 jobs and retaining longstanding employer Marley Tiles in the borough. Located on the A20/London Road, the site offers easy access to the M26 and M20, and would be home to a high-quality facility for leading parcel delivery company DPD to support online and high street retailers. The Wrotham proposals offer a win-win for Kent, with Marley Tiles being able to relocate to Panattoni Aylesford and the site freed up for greater levels of employment and the investment in a high-quality distribution centre.
Award-winning
Panattoni has been crowned the Developer of the Year at the Insider's South East Property Awards 2022. The company has also announced proposals for delivering development in Burgess Hill in West Sussex, plus a 200,000 sq ft planning application for a new unit in Crawley, with a new three-unit net zero development in Basingstoke currently under construction.
Long-term perspective
With its commitment to being a good neighbour and recognising that the industry it serves can impact on the local community will see Panattoni continue to manage the dayto-day operation of the Aylesford park going forward, and retaining it within its portfolio. As for the future, with the ongoing growth in online sales, the outlook for Panattoni who count many global brands and household names among their customers looks positive – with Kent a beneficiary with Panattoni always open to having a conversation about other sites.
For more information visit:
www.panattoni.co.uk/aylesford/
