58 international trade
One year on – are we more competitive?
It is a year since the Lib-Con coalition struggled to power. So is the UK now a better, more attractive place to do business than it was under Labour? asks Richard Willsher
The answer inevitably is inconclusive at this stage in the political cycle. Moreover it all depends where you’re from and what sort of business you’re in.
Nonetheless in its latest, 2010-2011 “Global Competitiveness Report” the Switzerland based World Economic Forum says that Britain is one notch higher than it was the previous year. The independent think tank ranks the UK 12th out of 139 countries.
It uses 12
criteria including among others, a country’s institutions, its infrastructure, macroeconomic environment, health and primary education, higher education and training and efficiency in its market for goods and services. But this report was released before the March Budget.
If you happen to be in the North Sea oil exploration business, suddenly the UK doesn’t seem such an attractive place to do business. “It is not surprising that a number of companies are reconsidering plans for investment in the North Sea,” commented
John Cridland, director-general of the Confederation of British Industry. “The £2 billion windfall tax is creating uncertainty for a sector which creates jobs and wealth for the economy, and already pays a significant amount of tax.”
Alan McCrae, partner, head of UK energy tax at consultants PwC added: “Stability, transparency and predictability are fundamentals of government tax policy for business, so why the oil industry has been treated differently is a question left hanging from the Budget.” Another hanging question might well be, who’s next?
Meanwhile members of the Federation of Small Businesses were underwhelmed. FSB national chairman John Walker commenting on its post-Budget poll said: “The Budget was pro-business and we are pleased that the Government has listened to some of our concerns and has extended small business rate relief and scrapped the planned 1p rise in
fuel duty and the escalator. But, as the results from our poll show, the Budget has not hurt small businesses, but it won’t help them to grow either.”
GDP is still growing. The Economist Intelligence Unit projects 1.6% for this year. Inflation however is beyond the control of the Bank of England because it is being driven by hikes in the prices of imported energy, commodities, food and other inputs. While interest rate rises are being priced in by the markets, the latest CPI inflation figure released by the Office of National Statistics for the year to the end of February was 4.4% up from 4% the previous month. RPI inflation was even worse at 5.5% (5.1% in January).
Some good news is that exports should be favoured by sterling’s exchange rates. However the rate versus the euro is virtually identical versus a year ago (there was a dip in between) and against the dollar the rate has increased unhelpfully from 1.55 to 1.64, though it does make oil a little more affordable.
Overall, with the addition of uncertainty over the impact of corporate and personal taxes, unemployment and the quality of public services delivery in the wake of the cuts, the outlook for the UK’s international competitiveness is far from clear. Chancellor Osborne may show a strong grip on the Government’s purse strings to the markets but that is not necessarily what is best for business. The jury is still out.
Taking the heat out of diesel emission standards motoring
A new low-cost, fit and forget ceramic coating offering surface temperature reductions of 125°C has been developed for diesel engine applications. Developed by Abingdon coatings specialist Zircotec, more known for its F1 work, its new ceramic formulation, together with changes to the manufacturing process have enabled the firm to reduce the costs by 50% for its new Performance Diesel product.
The coating provides an attractive option for truck and bus manufacturers challenged by the higher temperatures experienced with new Euro VI emissions regulations and testing methods set to be introduced in late 2013.
With engine costs rising significantly due to the addition of emissions equipment to meet the regulations, Zircotec believes its Performance Diesel coating offers OEMs a method to save costs on the whole life of the vehicle.
“Use of our Performance Diesel coating can enable engineers to solve existing heat issues without a major redesign of the engine bay as well as offering the opportunity to delete heatshields, claims Zircotec’s Peter Whyman. “As a fit and forget solution, whole life costs are lower too.”
www.businessmag.co.uk
A robot can be used to fire the molten powder at work pieces at temperatures exceeding 12,000°C
The coating is applied using plasma spraying at the firm’s factory in Abingdon , in effect welding the coating to the substrate. It can be applied to most metals as well as many plastics and composites, in the latter preventing delamination. A bespoke patent pending process, created by Zircotec, ensures that even plastics are unaffected by the plasma spray process.
The firm moved from Harwell just under a year ago and also works with most of the F1 teams helping solve issues with high-performance race cars.
Details:
01295-724130
www.propel-technology.com
THE BUSINESS MAGAZINE – THAMES VALLEY – MAY 2011
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