Corporation tax welcomed but only as a first step...

BUDGET day, and one of reckoning for business. The headlines:

: Corporation tax down from 30p to 28p - lowest of all major economies.
: Small companies tax rate from 20p to 22p from 2009.
: All companies to have £50,000 investment allowance.
: Science investment to rise to £6.3 billion.
: Capital allowances to be modernised.

Here two guest bloggers give their immediate thoughts.

Andrew Palmer, Confederation of British Industry deputy director for the Yorkshire and Humber: The CBI welcomes the cut in the headline rate of corporation tax.
By making this move the Chancellor has acknowledged the need for the UK to compete with the tax regimes in other developed countries in order to secure jobs and investment for the future.
In particular the change will benefit those big profitable companies that might otherwise be thinking of shifting their activities to lower tax regimes.
However the business sector as a whole will not be popping the champagne corks tonight. These changes will not initially reduce the overall burden of business taxes, and there will be losers as well as winners.
Some big companies that for one reason or another don’t pay much tax will lose out. So will small companies that don’t invest much, and so will not be able to benefit from the new capital allowances.
Companies will also be uneasy about Sir Michael Lyons’ proposals for a supplementary business rate. They will be very relieved that responsibility for business rates is not going to be returned to local authorities. But they will have to persuaded about the economic benefits that might come from a supplementary rate and they will need to be formally consulted on every proposal to ensure that their money will be well spent.
Overall, the Budget is only a first step on a journey that will need to go further. The challenge for government now is to get a grip on public spending so as to create the headroom that will be needed for further tax cuts in the years ahead.


Michael Izza, chief executvie of The Institute of Chartered Accountants in England and Wales:
Yet again, the Chancellor has ignored the requests of business and of professionals. A 2% cut in corporation tax is a step forward, but should be implemented now not in 12 months. By failing to do something about our over-complicated tax system and with the other changes particularly for smaller businesses, the Chancellor has missed an opportunity to ease the regulatory burden. It’s therefore not surprising that many businesses across the country feel disengaged from the political process.
In its budget submission to HM Treasury, the ICAEW called for, amongst other things, a reduction in corporation tax and a formal commitment to tax simplification that will help improve the UK’s competitiveness within the global economy. The budget submission also urged Government to review how its skills policy is working with business and improve the tax credits for small business research & development.
“Whilst we welcome many of the specific measures that the chancellor has announced, it’s still a piecemeal budget which tinkers with the system rather than starting the comprehensive reform which is so overdue. The challenge for his successor will be to reform as much as to be prudent.

March's Business supplement.... out tomorrow

NORTH East Lincolnshire Council has shown it means business, as one of the most rapidly improving local authorities.
Tomorrow, in Business, we report on how chief executive George Krawiec sees the future, working with industry, academia and funding agencies to improve the whole area.
And we meet Derek McKenzie, recently appointed head of planning services with the local authority.
He outlines some innovative proposals for attracting inward investment and making the whole planning process far more user-friendly, with an insight into dealing with conservation and tackling flood risk.
Back into the private sector, we take an in-depth look at the expansion of one of the area’s major fabrication companies, see how one man is on a mission to beat excess luggage charges.
Awards time is looming, and we launch the search for the business stars of 2007, as we prepare for Northern Lincolnshire Business Awards with the Hull & Humber Chamber of Commerce.
Then there is the focus on all the key sectors, the latest career appointments and commercial property deals.
All this and much more in Business tomorrow, free with your Grimsby Telegraph.

Boot-iful idea should kick town on

HENRY Boot's £30-million plan to bring major retailers to Grimsby is more than a step in the right direction, it will allow town centre redevelopment to kick on further.
The 150,000 square feet of additional retail space should not compete with the gem Freshney Place, but extend the traditional town centre and allow for big names with bug size requirements to come in.
But the beauty of this plan, currently with the council, is how it will naturally extend the town centre - and by that I mean the area people will be willing to walk and shop.
While generally welcomed, the scheme does pose a question over extra traffic. We are a lazy bunch, we will park as close as possible, and when the wheather isn't the warmest then the attraction of waterside walks is lost slightly. But with Freshney Place's two major car parks, Abbey Walk multi-storey not far away, hopefully the proximity of the development will encourage people to use their feet, and not clog the likes of Frederick Ward Way and Corporation Road up any more. Stretching to Sainsbury's, it also could act as a bonus for Alexandra Retail Park and the developments that have revitalised Victoria Street North.

• An exhibition with more details on the proposal is being held at Grimsby's National Fishing Heritage Centre from noon to 7pm on Wednesday, March 21.

Guest Blog: Mike Purves, an organiser of the North Atlantic Seafood Conference, held in Oslo, Norway.

There was astrong Grimsby presence from the seafood secotr in Oslo. Here Mike Purves reviews the action for Business.

“A great conference – a terrific platform for idea sharing and communication of some of the key issues facing our industry today”.

This comment, from one of 428 delegates from 27 nations taking part in the second North Atlantic Seafood Forum, summed up the mood of the assembled catchers, processors, wholesale and retail buyers, traders, regulators and politicians who gathered for two days at Norway Trade Fairs’ Lillestrom, Oslo base on 27-28 February.

Over forty speakers, many of them CEO’s of major Norwegian and international seafood businesses, addressed a wide range of issues covering every aspect of North Atlantic cold-water species production trading ,retailing and marketing. The first day focused on the theme of ‘Market Access and Barriers to Free Trade’. Opening proceedings, Norwegian Seafood Export Council Chair Rolf Domstein observed:
“Many of you here are at the top of your profession, and it is the quality and huge range of experience represented here which is so striking. But no matter what our place may be in our own organizations, we come here together as equals.”

In a number of polished presentations by seafood CEO’s an overall theme emerged of a robust and stable supply situation and record 2006 prices driving some exceptional company performances, especially in the buoyant salmon sector.

Delegates witnessed the formal signing of a highly significant new international agreement struck between two major educational institutions specializing in fisheries management and science. Tromso University is an established centre of excellence in further education in fisheries and seafood education, backed by important research facilities. Grimsby Institute of Further and Higher Education, with over 25,000 students and postgraduates is sited in one of Europe’s biggest seafood processing hubs and has a worldwide track record in food industry training and consultancy. The two institutions will come together to offer a completely new post-graduate qualification in seafood industry management which will draw on the combined resource base of both. Grimsby and Tromso have been formally ‘twinned’ for over forty years, and this was also celebrated by a ceremony at the conference.

As speakers from Norway , Iceland and Denmark outlined their individual predictions for the coming year and beyond, a large group of bankers representing Norway and Iceland’s biggest finance houses listened intently. As one speaker observed, “With a record year behind u,s this was a good time for my banker to be listening.”

After delegates and speakers enjoyed the biggest of several parties which have given the North Atlantic Seafood Forum its reputation as an excellent networking event, day two opened with a major segment on sustainability sponsored by the UK’s Seafish Industry Authority and chaired by its Vice-Chairman John Whitehead. Rupert Howes, CEO of the Marine Stewardship Council, made a strong pitch for their certification and labelling programme (not entirely uncontroversial ), claiming that 90% of consumers want a label on products and menus. MSC now certifies 27 fisheries and is assessing 18 more worldwide – Howes told the conference that MSC approval now covers 33% of whitefish globally, with over 500 products carrying the MSC logo.

Delegates were then gripped by some dramatic new science on the observed effect of global warming on the North Atlantic food chain, delivered by one of the world’s leading experts, Dr Chris Reid. CO2–driven warming is now not just indisputable but is accelerating, said Reid, with serious consequences for the marine food chain. As the ocean warms, (possibly by 6 degrees in northern latitudes) some North Atlantic species such as cod will be seriously impacted, while others will move northward. To underline the rapidity of warming, a forecast that the Arctic may be ice-free in 100 years has now been revised to just 10 years.

Iceland’s Fisheries Minister Einar Gudfinsson then took the stand to underline his nation’s excellent record in fisheries management and (following the MSC presentation) put a case for a separate Icelandic eco-label, which sparked some lively questions from the floor.

The conference then moved to a Seafish-inspired segment on retail market by some outstanding presentations. Moderated by Youngs Seafood CEO Wynne Griffiths, delegates heard about the latest UK consumer research from Seafish’s Karen Galloway and an impressive exposition by Alison Austin, Sainsbury’s head of responsible sourcing and own-
3 of 3
brand labels. The UK’s biggest seafood retailer, selling 55.000 tonnes annually with strong growth, Sainsbury is committed to responsible sourcing and strongly supports MSC labelling.

The conference then heard from Norgesgruppen’s Vidar Olsen. The company, which runs 325 fresh fish counters in Norway from supermarkets to corner shops is making numerous changes to respond to rising consumer expectations, and is intent on driving variable quality standards higher.

The conference then divided with some delegates joined the banking community for finance round table discussions, while the Pelagic Summit got underway with speakers from Norway, Scotland, the Netherlands and Russia. The message overall was that the pelagic sector is in good shape, backed by stable and growing stocks, particularly in herring. Norway will see the creation of a huge ‘pelagic supermarket’ (as CEO Gunnar Domstein described it) as five companies merge to create the giant new Norway Pelagic, controlling half of all Norway’s pelagic seafood output.. Scottish EU Pelagic RAC Chairman Iain MacSween said that for healthy, inexpensive fish, the herring was king, in his view. Gerard van Balsfoort, representing the big Netherlands PFA Group operating 25 ships, reminded the conference that ‘there were other ‘pelagic supermarkets’ outside Norway.

An exit survey of the delegates found that 93% rated the conference either ‘very good’ or ‘good’ overall, commenting favourably on the quality of presentations and the wide scope covered. Conference Director Jorgen Lund: “ With this second event such a success, we feel that NASF is now firmly established on the international calendar. Our challenge now is to surpass this year’s high standard next year,and we aim to do so.”

The third North Atlantic Seafood Forum and linked study tour will be held in Oslo on 19-20 February 2008.

Time to order the Cristal?

TODAY'S news that Millennium Chemicals is to be sold has been greeted with positivity on the south bank.
The huge plant at Stallingborough is a beacon in the portfolio, which includes sites in Australia, Brazil, France and the States.
Already, before the deal is completed, serious consideration is being given to how the Humber plant can benefit, which is great.
Often in these circumstances there is a period of review, or analysis, but it appears here that Stallingborough is seen as a leading light by the Saudi buyers. Site director Leon Zaal spoke with confidence and enthusiasm about the future as part of Cristal, and with more products and new markets on the horizon for the titanium dioxide that is produced, the future is clearly seen as a prosperous one.
This great plant has stood the test of time, with manufacturing going through the tough times of the Eighties and the increasingly competitive arena it is now in.
It looks to me as if it will now be really valued by a company dedicated to the product. Lyondell was a cross-spectrum operation and there appears to have been an increased focus on the oil side of the business in America.
The strategic review that I reported on in October followed an oil refinery acquisition, and was clearly an anxious time for the management and indeed the staff. No matter how good your operation or how in demand the product, that change and that feeling of not being wanted by your owner - even if you are valued at £612-million - is difficult, more so perhaps when you know you are on to a good thing. But businesses are assets, and how they are managed depends on how the assets are rated at the top.
This comes back to the business you specialise in. Cristal's full title - the National Titanium Dioxide Company Ltd - is a Ronseal moment. It does exactly what it says on the tin, and reports suggest it is very, very good at it. Joining the Millennium creates a major force. The transition period can often be cautious, but the abounding optimism should be reason for motivation and opportunity.
Let's hope that we see the major development that has been indicated and that the east coast appeals to the Middle East.

Dragon's teeth sink Aqua-Mum

DEFLATED, no doubt, is how local entrepreneur Sandra Johnston-Murphy felt as she slid out of the Dragon's Den. It was just a shame that her product was too.
Her valiant attempt at getting backing from the best of the business world on the popular BBC2 show failed, as her inflatable floatation aid for mums-to-be went down under scrutiny.
A faulty valve on the Aqua Mum may have been her downfall, but her determination and steely resolve was clear to see.
Deborah Meaden picked up on her character straight away, and for her to do so in five minutes for me demonstrated why these dragons are at the top of their game.
Having met Sandra, and spent time with her understanding her product and business aspirations, I had seen this determination and drive, the focus and energy she puts in. This was grasped in seconds by the panel.
But that alone does not a good business proposition make, and while her rapid progress to develop and get a product to market was praised, the quality in the end was the downfall.
Solve this and a super business could well float an investor's boat, because if there is anyone you would want working on aproject you had a financial interest in, it would be someone who has her traits.