Thanet and East Kent Insider 25th April 2011

Thanet & East Kent Insider

 

25th April 2011      Issue No.: 153

 

1. Energy Costs More Shock Horror

We last reported on energy costs in the Thanet & East Kent Insider of 8th January 2011 when we listed the energy price rises for the previous year and stated that ‘some of the monthly figures quoted are alarming’. We continued that ‘Monthly fluctuations may normally be of interest to speculators more than the rest of us who have longer term trends in mind, but when the pace of rises is increasing so sharply, it suggests that anyone who does not review their energy costs now might have serious cause to regret it in the near future.’ That near future now appears to have arrived. We are again grateful to Martyn Young of Atlantic Business Resources, tel: 0781 353 7456, for bringing our attention to the E.ON Market Report of April 2011 which gives a detailed breakdown of the gas, oil, coal and carbon markets for the period March 2010 to March 2011. The huge earthquake off the coast of Japan on 11th March 2011 and subsequent tsunami provoked a sharp rise in UK power prices last month. The reason is that power plants using fossil fuels will be required to contribute to the shortfall from the 10GW loss from Japanese nuclear plants. The abrupt closure of seven German nuclear plants will also impact on UK energy costs. During the month of March 2011 alone, the power and gas prices rose by 10% and 13% respectively. A monthly rise in oil prices of around 1% was not helpful, as anyone with a car, van or lorry to run will confirm. There is no disguising that the rises in energy contract prices over the last year and, in particular, the last month are frightening as the table below shows.

 

Supply

Year Mar 2010 – Mar 2011

Month Mar 2011

Average front month power contract price

53% higher

10% higher

Average front month gas contract price

100% higher

13% higher

Average front month oil contract price

43% higher

1% higher

Average Apr’11 Annualised power price

39% higher

14% higher

Average Apr’11 Annualised gas price

58% higher

5% higher


2. What Can Be Done About Energy Costs?

The global strategy is one for governments. We will certainly be raising the matter on your behalf with our Members of Parliament and with the Bank of England. On a local level, the sharp rises mean that it is more important than ever to get the best possible deal on your energy supplies. If you have not recently reviewed your energy costs, we strongly advise that you do so without delay. The following Chamber members are recommended: Martyn Young of Atlantic Business Resources tel: 0781 353 7456; David Batten of Auditel (UK) Ltd tel: 0797 349 6411; Jeremy Bailey of Auditel tel: 01843 588 776.

 

3. Your Money, Hadlow College, SEEDA and BBC

Many Chamber members have commented on the impact of public funds on the regeneration of East Kent. The consensus seems to be qualified support for strategically targeted spending on infrastructure developments such as improved transport links, a Manston Parkway Station, faster rail times to London and investment in better school and college buildings. As a general rule, our Chamber members prefer to keep their earnings rather than have them taken way by any remote body which thinks it can spend it better than they can. Is that surprising? Perhaps not, but as a Chamber we are duty-bound to reflect those views as we did last week on the BBC Radio Kent breakfast show; click on http://www.bbc.co.uk/iplayer/episode/p00g1xxz/Breakfast_with_John_Warnett_and_Clare_McDonnell_21_04_2011/and fast forward to fast forward to 1:23:40. The recording is available until 28th April 2011.

 

4. Turnover Is Vanity, Cash Is Sanity

We are grateful to our friends at the Institute for Independent Business for drawing our attention to a neat summary of the needs and problem areas of companies based on the fact that ‘99.5% of all businesses in western economies employ fewer than 200 people’. You can interpret this to mean that if your company has a workforce with more than 200 people, you can ignore the rest of this item with impunity. On the other hand, tycoons might just find something of interest in the tribulations of others. The IIB informs us that feedback from thousands of independent businesses has identified the following problems: Cash Flow, Funding, Lack of updated information, Lack of exit strategy, Lack of time, Health & Safety and other burdensome legislation, Loneliness, Loss of original vision for the business, Marketing, Profitability and Sales. It is interesting to note that Cash Flow heads the list and Sales is the last item mentioned. Regular readers may recall the advice of the Chamber’s credit control expert, Norman Gray, in the Thanet & East Kent Insider of 9 th October 2009 where he is quoted as saying: ‘If you make a sale of £20,000, all you have done is create a debt. It is the credit controller who ensures you get paid.’ Wise words indeed and worthy of repetition. Surprising for some but not perhaps for the owners of businesses is the presence in the list of ‘Loneliness’. The stresses and strains of owning and operating a company may not always be apparent to the workforce. The proprietors usually find it difficult to discuss every problem with their management team and often find that their own family and friends are happy to discuss anything but problems in the workplace. The Chamber’s Business Advice Clinics offer a friendly and confidential resource to businesses of all sizes where work issues can be discussed in complete confidence. The sessions take place on the first Friday of the month in Broadstairs and the first Wednesday of the month in Dover. To reserve your place, telephone 01843 609289 or email This email address is being protected from spambots. You need JavaScript enabled to view it.with the subject line ‘Business Advice Clinic’.

 

5. Bank of England

As a direct result of our close ties with the Dover District Chamber of Commerce, established in 1850, the Thanet & East Kent Chamber maintains strong formal links with the Bank of England (BoE). As the two Chambers are the largest business support bodies in their respective districts, the arrangement ensures that the East Kent coastal business community has a voice where it matters. The monthly meetings of the BoE’s Monetary Policy Committee set the interest rate for the UK. The bank also has a statutory duty to ‘ contribute to protecting and enhancing the stability of the financial systems of the United Kingdom’.   As always in these matters, the views of Chamber members are more important than our assumptions. SWIFT Codes for all Banks in Australia With two meetings scheduled with the BoE within the next month, we especially welcome your prompt comments on any aspect of financial policy. Please send these by email before Thursday 5 th May 2011 to This email address is being protected from spambots. You need JavaScript enabled to view it.with the subject line “Bank of England Comments”.

 

6. What Does the Bank of England Say About Business Conditions?

The BoE makes regular reports on UK industry which inform government and companies alike. The latest Summary of Business Conditions remarks on ‘a softening in the housing market’ but relates that ‘In the service sector, contacts expected investment to continue to grow at a moderate pace’. Inflation in the prices of raw materials contrasts with the news that ‘growth of exports of goods and demand from Europe and the United States was beginning to pick up.’ Under the heading of Consumption, we learn of a ‘shift towards consumption of lower quality products’ which is attributed to ‘falling confidence among households and the effect of high inflation on real spending power’. Fine dining establishments have suffered as “Dining out in restaurants had declined but demand for fast food continued to strengthen’. Fast rising petrol prices may be behind the BoE’s report that there was evidence of ‘a switch-away from the use of private cars towards public transport’. There is some comfort for companies in the higher end of the market where the bank notes ‘some reports of rising spending on premium brands of food, retail goods and cars’. For a copy of the full five pages of the report, Chamber members are invited to email This email address is being protected from spambots. You need JavaScript enabled to view it.with the subject line “BoE Summary of Business Conditions”.

 

7. Turner Contemporary Update

The Turner Contemporary gallery on Margate’s seafront has received extensive coverage on national television, UK and regional newspapers, radio networks and indeed in the pages of the Thanet & East Kent Insider. There have been many doubters in the last seven years and it may be no surprise that critics, fewer in number than before, nevertheless are still keen to talk down Margate, rubbish East Kent and generally spread misery to all those who will listen to their comments or read their views. We prefer to concentrate our efforts on putting money in the pockets of our members and their employees by working with the media in supporting the growth of our local economy by attracting inward investors and by encouraging visitors to appreciate the attractions around us. Not everyone may agree with our assertion see http://www.kentonline.co.uk/kentonline/news/2011-1/april/19/turner_visitors_disappointed.aspxthat the Turner Contemporary is 'Innovative, fresh, clean, exciting, good-looking, enterprising, regenerative and in the news’ , although it must be difficult to claim that it is not ‘in the news’, but we see little point in telling the world not to come here. The Thanet & East Kent Chamber will be cooperating fully with an independent economic impact study which is due to be completed before the end of the year. We confidently expect it to show positive benefits for the East Kent coastal business community.

 

8. Charity And The Law

Our experience with lawyers in East Kent has been wholly positive. Indeed, we are fortunate to have such well-known and respected legal firms in our membership. One Chamber member has been less fortunate and recalls a story from his time in London. We have our doubts about this account, but leave it to readers to judge for themselves. ‘One weekend, I was collecting money for the Mayor’s charity in our borough of North London when it occurred to me that the lawyer living around the corner reportedly earns over a million pounds a year. In all the years I had been collecting for various charities, to my knowledge he had never ever contributed. Determined to change this lamentable injustice, I went to his substantial residence, noted the three luxury cars in his large garage and rapped determinedly on the door. He came to the entrance with a gin and tonic in his hand and an aggressive look on his face. I explained politely that I was collecting for the needy and disadvantaged in the area and asked him for a contribution to the community in view of his considerable wealth. He replied: ‘I don’t know who did your research. Clearly, you are not aware that my mother is seriously ill with medical bills of many times her income.’ I mumbled something along the lines of ‘No er-r-r I didn’t.” He continued: “Or that my younger brother, a disabled serviceman who was injured in the war in Afghanistan in the service of his country, needs expensive specialist equipment in his house to make his life bearable.’ Again I just stammered: ‘Sorry, I had no idea’.   He added: ‘And my poor sister and her husband died in a car accident last month leaving three children without their parents and all alone in this world’. Embarrassed now beyond measure, I conceded with a humble apology and turned to leave. Sensing his complete victory, the lawyer added finally to my retreating back; ‘And so if I don’t give a penny to them, why on earth should I give anything to you?’.

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