Dorset’s business leaders recently came together to discuss the future of the economy. Billed as ‘Business Clarity in Uncertain Times’ the event included guest speakers and featured a Question Time style debate.
Held at Bournemouth’s newest hotel, the towering Hilton, the event was designed to help guide decision-makers and clarify their view of this future to their business against a background of uncertainty and change.
Brexit, export opportunities, addressing skills shortages, business rates and the Budget, all came under the spotlight.
The event was hosted by three major players in the Dorset economy; accountancy, investment management and tax group Smith & Williamson, solicitors Steele Raymond and NatWest.
Presentations were made by NatWest Markets currency strategist Paul Robson, Steele Raymond Chairman Tim Stone and Smith & Williamson senior partner Chris Appleton.
This was followed by questions from the audience to a panel of experts including the three main speakers and NatWest Corporate and Commercial Regional Director Dan Salanson.
The session was hosted by Daily Echo Business Editor Darren Slade.
Smith & Williamson senior partner Chris Appleton said the idea of the event was to pull three well-known organisations together to pool resources and experiences and help local businesses to see their way through a very complex set of business circumstances.
He mentioned Germany’s Mittelstand being a powerhouse of medium-sized businesses, but Britain failing to emulate this because businesses here often plateau and then exit too early.
Chris referred to Smith & Williamson being a corporate founder of the ScaleUp Institute, a collaboration between the Government and the private sector focused on making the UK quite simply the best place in the world to scale up a business.
He added: “Research by the ScaleUp Institute highlights six critical areas which seem to hold back British businesses. And in our experience two key areas would be the absence of leadership experienced in delivering successful scale-up growth coupled with significant shortages in skilled and trained people. Skills shortage is, right now, a significant factor in Bournemouth and Poole.
"Leadership is critical and in reality it’s those who can demonstrate they have scaled up a business, and we need to learn from them.
“Access to markets is also challenging with many smaller businesses finding it difficult to get purchasing from larger companies or the public sector. It is a jungle out there and as good a time as any to go into the export market."
Steele Raymond chairman Tim Stone reflected on why some businesses thrived and others withered.
He added: “I think a mistake we sometimes made in our business in the past was to focus too much energy and that precious resource of time on what the competition were doing and try and model our activities off theirs.
“What we have got better at doing is recognising what we do really well and focusing the majority of our effort on perfecting that and to a great extent letting the competition worry about what they are doing – rather than us doing the worrying for them.”
Tim added: “What research shows us is that the best brands in the world have weathered economic storms and uncertainty because they’ve continued to invest in their business, in marketing and in business development – put simply, they haven’t stood still."
NatWest Markets strategist Paul Robson spoke of fiscal uncertainty and a slowing economy.
He said: “The problem with uncertainty is that is restricts growth and the ability to invest. That is fundamental to the development of SMEs, which are the backbone of the UK economic recovery.
“Business craves clarity and this might be in short supply over the next couple of years, but there are reasons to be optimistic at – at home consumers continue to spend and in the US, certain sectors are positive on the economy.
“However, there are headwinds – this is starting to come through in economic data, which is picking up softness and inflation. Article 50 will gradually bring more clarity.
“We will either end up in a virtuous cycle – consumer demand holds up, companies continue to invest and the economy is supported – or a negative vortex, in which the reverse might be expected."
Paul added that the UK remained competitive due to the exchange rate, and forthcoming European elections in the Netherlands, France and Germany.
At the Q&A session the panel was asked for a reaction to Chancellor Philip Hammond’s first Budget.
Tim Stone said his was disappointed there were no changes to stamp duty on residential property sales and added: “I speak to property agents who say this is creating stagnation – no one moves and the knock-on effect is that no one has the aspiration to move.”
Dan Salanson said: “There was not enough incentive in the budget for regional entrepreneurs.”
Paul Robson said expectation levels had been low and it turned out to be a ‘boring’ budget.
Adrian Oliver of precision engineering company Field International asked what Brexit would mean for British trade.
Chris Appleton said: “Exporting is a tough field. During the 2008 financial crisis the UK economy suffered badly. By comparison, economic conditions are now better and, if exporting is a source of growth, now is the time to act.”
Tim said: “There is an appetite for great British brands. This opportunity to de-couple must be taken as people will want to buy British. It is as much in Europe’s interest to do a good deal with us as it is us with them.”
Paul said: “Since the referendum sterling has fallen in value by 15-20%, leaving British companies in a position to increase their share of exports. Agreeing a new European trade deal will be challenging and a focus on other markets will be needed, including Commonwealth countries.”
Paul Fairclough, Client Relationship Director at recruitment business Advanced Resources Managers (ARM) asked about how uncertainty would affect job market movement and skills shortages.
Tim said: “We must take a long-term view on recruitment. There is certainly a generational gap after many people left the legal profession during the recession. We now have a huge opportunity to attract talent into a wonderful place in which to live and work, that’s Dorset’s USP.”
Chris said: “We have full employment, inflation is rising and people have less money so no one is moving. The work/life balance is therefore a major factor in encouraging new people to take jobs.”
Dan added: “Apprentices could be an answer. Hungry young people with new thought processes. We are also suffering from a lack of middle management which may drive spiralling wage inflation.”
The final question was about workforce shortages, especially if workers from mainland Europe were prevented from working in Britain by Brexit.
Dan queried what seasonal businesses would do, especially if local employees would not take positions as seasonal workers. Chris believed some companies would move to Europe and employ people there. Paul questioned if the level of benefits was too high and the ‘benefit culture’ prevented people from taking jobs. Tim suggested youth expectations had risen beyond reason and overseas workers were grafters and had a better attitude.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.