Brexit: JD Sports to open Dublin warehouse

Retailer JD Sports is to open a 65,000 sq ft warehouse near Dublin to tackle post-Brexit trading problems.

Goods which JD imports from East Asia to GB now incur tariffs when they are distributed onward to its stores across Europe.

To deal with this JD has already opened a warehouse in Belgium but says it needs a specific facility for Ireland.

The company says the Irish facility will become operational in the second half of this year.

It is also considering a bigger facility elsewhere in the EU from which it would process all EU online orders.

In a trading update the firm said: “We continue to review opportunities for a larger permanent facility in Europe which can process substantially all of the volume required for stores and online orders in mainland Europe although it will likely be Autumn 2022 before an enlarged facility would be available for use.”

In February the chairman of JD told the BBC that Brexit had turned out to be “considerably worse” than he feared.

Peter Cowgill said there was no true free trade with the EU, because goods that JD Sports imports from East Asia incur tariffs when they go to its stores across Europe.

“I actually think it was not properly thought out,” he said.

“All the spin that was put on it about being free trade and free movement has not been the reality.”

By John Campbell
BBC News NI Economics & Business Editor

Goldman Sachs to open office in Birmingham in UK

LONDON (Reuters) – Goldman Sachs said on Tuesday it would open a new office in the English city of Birmingham, expanding its office footprint in Britain at a time when many rivals are reducing space due to the pandemic.

The bank said the first staff would begin working in the new office in the third quarter of this year, with headcount growing to several hundred over time.

Goldman said its engineering division would be the first to base staff in Birmingham through a mix of hiring and transfers.

The U.S. banking giant’s CEO David Solomon has been among the most vocal company executives wanting to get staff back to the office as soon as local virus restrictions allow, calling remote working an “aberration” in February.

But other banks – including HSBC – have been quick to target deep office cuts particularly in retail banking and even move some staff to permanent home working.

“We see tremendous opportunity to enhance our UK presence and continue delivering for our global clients,” said Richard Gnodde, chief executive officer for Goldman Sachs International.

Reporting by Iain Withers, Editing by Tommy Wilkes

UK: Redcar cyber-attack: Government to help cover costs

A council left without online services for weeks following a cyber-attack is to receive £3.68m from the government to help towards the cost of rebuilding its systems.

The attack was estimated to have cost Redcar and Cleveland Council £10m, with the authority having to foot the remainder of the bill itself.

It said no ransom was paid to the hackers.

Critics said the government should be covering more of the cost.

Experts from the UK’s National Cyber Security Centre (NCSC) had to be drafted in to help restore appointment bookings, planning documents, social care advice and council housing complaints systems that had been knocked offline in February last year.

‘Conned’ over settlement

The council said the money to be provided by the government would help replenish its reserves, which had been used to restore its online systems.

It declined to say whether any services would be affected as a result of covering the remainder of the bill.

Council leader Mary Lanigan, who heads a coalition of independents and Liberal Democrats, said: “We are pleased that the government recognised the unique circumstances under which we requested support, and awarded grant funding, rightly distinguishing the criminal ransomware attack suffered by the council from the financial rescue packages of some other local authorities where permission to borrow has been granted.

“No money was handed over to these criminals and we continue to hope that they will eventually be brought to justice.”

Middlesbrough South and East Cleveland MP Simon Clarke, a Conservative, described the settlement as “exceptionally generous”.

Fellow Tory Jacob Young, MP for Redcar, said it would “go some way to restoring the hit on the council’s finances”.

However, former council leader Sue Jeffrey, of Labour, said residents were being “conned into thinking they have got a good deal” having only been awarded “a tiny proportion of the support they were promised by the government and local Conservative MPs”.

Patchy corporate climate disclosure prompts G20 watchdog to act

LONDON (Reuters) – G20 companies will face common disclosure requirements on climate change risks under plans by the Financial Stability Board, which coordinates financial rules for the group.

In the latest sign of how policymakers want faster action to replace the patchy progress seen so far, the FSB said on Tuesday that said it will set out in July ways to promote consistent, high-quality climate disclosures.

Investors have long called for globally comparable disclosures to stop so-called greenwashing, where firms exaggerate their responses to climate change or underplay how global warming is likely to affect their business.

Although recommendations by the FSB’s Task Force for Climate-related Financial Disclosures (TCFD) are being applied by some companies, they are voluntary and critics say they lack detail, while implementation has been patchy.

While the 27-member European Union is pushing ahead with reforms to define which investments are “sustainable” and how to disclose them, the FSB said it would build on the TCFD recommendations.

The FSB, whose members include central banks, financial regulators and treasury officials from G20 countries, said it backed plans by the IFRS Foundation for a global sustainability reporting standards board based on the TCFD recommendations initially.

Given a proliferation of work on climate disclosures, the FSB said there was a need for a “strategic vision, good coordination, and clear communication to the G20 and the public” and it will present a multi-year roadmap this summer.

“This will leverage work being carried out by standard setting bodies and international organizations while simultaneously using our mechanisms to identify vulnerabilities and build consensus on ways forward,” it said.

The FSB and the Network for Greening the Financial System, a forum of central banks and financial regulators for climate related issues, will also work with each other.

Exclusive: UK refers Facebook acquisition of Giphy for in-depth probe

(Reuters) – Britain on Thursday referred Facebook Inc’s acquisition of GIF website Giphy for an in-depth probe after the U.S. social media giant told the country’s competition watchdog it would not be offering any undertakings to address its concerns.

The regulator last week gave Facebook and Giphy five working days to offer proposals to address its concerns over their merger deal, which could affect digital advertising and the supply of animated images.

NFT investment firm to float in London

(Reuters) – An investment vehicle for “unique” digital products such as artworks said it will float in London, in the latest sign of the investment craze for so-called ‘non-fungible tokens’.

NFT Investments, established by the co-founders of cryptocurrency firm Argo Blockchain, said on Thursday they intend to raise around 10 million pounds ($13.77 million) by floating on the niche Aquis Stock Exchange Global Market.

The firm said this would value it at 25 million pounds.

NFTs are a digital signature saved on blockchain ledgers that allow someone to verify the ownership and authenticity of items, with one artwork selling this month for nearly $70 million.

Sceptics have questioned how unique a digital artwork can really be and warned NFTs could be another bubble waiting to burst.

($1 = 0.7265 pounds)

Mastercard, rivals ‘ran cartel’ on cards for the vulnerable – UK watchdog

LONDON (Reuters) -Mastercard is among five companies which broke the law for cartel behaviour when offering pre-paid cards to vulnerable members of society, Britain’s Payment Systems Regulator said on Wednesday.

Mastercard, allpay, APS, PFS and Sulion agreed not to compete or poach each other’s customers on cards used by local authorities for welfare payments including to the homeless, victims of domestic violence and asylum seekers, the PSR said.

The investigation is ongoing and the companies can make representations on the provisional findings, the PSR said.

Mastercard, allpay and PFS have admitted liability and if the regulator ultimately concludes there is wrongdoing have agreed to pay maximum fines totalling more than 32 million pounds ($44 million), the watchdog said.

The PSR alleges two infringements of Britain’s 1998 competition law.

One breach took place over six years between 2012 and 2018 and involved all five firms, the PSR said.

The other lasted between 2014 and 2016 and involved APS and FPS, the watchdog said.

“Pre-paid card services, like these, can provide significant benefits to local authorities as one way to make welfare payments to some of the most vulnerable people in society,” said Chris Hemsley, managing director of the PSR.

“By colluding in this way, we consider the parties were acting as a cartel… Collusion in payments is absolutely unacceptable. Where we see it happening, we will take action, stop it, and seek to impose significant penalties.”

Mastercard said it took the issue very seriously and had put further controls and training in place, adding the incident was isolated to UK prepaid cards.

“We apologise that the actions of two former employees resulted in the standards expected of us not being met in this instance,” a Mastercard spokesman said.

PFS said it would make an announcement in due course.

Allpay and APS were not immediately available for comment. Sulion could not be reached.

Bosses share their experience: Three months Post-Brexit

The UK’s new trading relationship with the European Union (EU) might only be a few months old.

But some businesses are struggling to adjust to the new trading landscape outside of the customs union and single market.

Firms across four different sectors share their stories of rising costs, extra paperwork and packages that never arrive.

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The fashion firm

Ben and Alice, co-founders of Country of Origin knitwear
image captionBen and Alice co-founded Country of Origin in 2013

Ben Taylor and Alice Liptrot have come a long way since they founded their knitwear brand Country of Origin straight out of university.

The couple now employ four other people and sell clothes wholesale to independent shops and to customers online.

About a third of sales, Ben says, came from customers in the EU. 

“But since the end of January, it’s tailed off completely.”

Ben says the firm has been caught up in an “onslaught of admin” and about 80% of orders to the EU after Brexit have seen customers having to pay extra charges.

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What are the new rules?

New rules have come into force for those in the UK either importing from, or exporting to, Europe.

Exactly what licenses are needed or what duties must be paid depends on what is being exported, its value, where the product originates from and to which country it is being sent, according to government guidance.

From 1 January, the UK government introduced a rule that VAT must be collected at the point of sale rather than the point of import.

This essentially means that overseas retailers sending goods to the UK are expected to register for UK VAT and account for it to HMRC if the sale value is less than €150 (£135).

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One customer in the Netherlands was asked to pay an additional €100 (£88) on their order, Ben says, for “government fees”, with no further explanation from customs agents.

Ben adds that the firm is not an “inexperienced” exporter, having shipped goods to Japan and the US. He says the lack of clarity on why certain charges are being raised is “frustrating”.

The next step? “To get some kind of operation going in Europe – moving stock to dispatch from there because this just isn’t sustainable,” he says.

“I just hope this doesn’t put off any other young person who wants to start a small business today.”

The flower grower

Diane Collison
image captionCollison’s Cut Flowers supplies supermarkets such as Sainsbury’s, M&S and Asda

Diane Collison has been responsible for helping her firm, Collison Cut Flowers, adapt to post-Brexit changes.

The Norfolk cut flower producer imports 35 million bulbs a year – mostly tulips from Holland, scented stock and lilies.

The government recently pushed backintroducing new checks on most imported plants until 2022. But some of the bulbs imported by Collison’s Cut Flowers count as “high-risk”, so they have already had to make some changes.

Diane has registered the business as a “place of destination”, where plants could be checked by local health teams, and for an EORI number so the firm can bring EU goods into the UK.

Day-to-day, she must email a freight forwarding business details of expected deliveries before they hit UK ports. That’s on top of registering invoices and plant health certificates with UK authorities.

“Each load is probably costing us about £200 extra now – and at about 150 per year that’s not an insignificant amount of money,” Diane says.

The firm may soon need to increase costs for customers.

“But I’m just pleased we’ve managed to get our imports in and what we’ve done is working,” Diane says, adding the firm has only seen deliveries delayed by a few hours so far.

The sausage exporter

Steve Howell of Foodlynx
image captionSteve Howell’s Foodlynx suffered a three-day delay to the one shipment it has made since Brexit

Steve Howell’s Foodlynx sells British sausages, bacon and bread to hotels and restaurants across the EU. 

Typically it sends one or two trucks out a week and up to six in the peak summer season. But the Dorset-based firm suffered a three-day delay to the one shipment it has made since Brexit.

Its truck was held up at the port of Le Havre in France as customs officials questioned whether certificates for some animal products had been filled in correctly.

It was moved to another cold storage unit nearby while the issue was sorted out. Steve was charged €3,914 for storage and admin costs.

Although recent statistics show that UK exports to the EU dropped significantly in January, Steve believes other factors are at play.

“Demand dropped off due to Covid last year anyway, plus we, like many others advised our customers to stock up before Christmas to avoid these types of delays.

“Now, the customers are running low on stock and we’re still trying to battle through paperwork, new labelling regulations and compliance.”

“The whole point [of Brexit] was to take back control of our country,” Steve says.

“We have succeeded in doing exactly the opposite because British exporters are completely and utterly blown out the water.”

The car parts dealer

Martyn Wilson
image captionMartyn Wilson sells classic car parts across Europe, but is considering focusing more on US customers

Martyn Wilson set up his classic car parts firm 12 years ago and about 60% of orders are shipped to the EU.

VAT is now applied at the point of sale for parts under £135 – on top of duty charged on car parts at 24%.

Citroen Classic Car Parts typically sends out 130 items per month – but difficulties arose quickly.

“For couriers, I have to supply customers’ contact details – and often have to write to them in French and German to get those, which is a bit of a drama we never had to deal with before.”

Deliveries into Italy, for example, have never arrived and others have been returned due to customers not paying the new charges.

“It has impacted us certainly from the mental point of view. It’s a lot of additional stress and you’re continually on deadlines, trying to get good reviews from customers and make sure things get delivered.”

Martyn points out that he is able to deliver car parts to the US in less than 24 hours – and no tariffs are applicable on those under $700.

“I will muddle on through in the best possible way I can and maybe it’ll push me to think outside the box a bit. 

“Perhaps in the long-run it might be good for us, but we’re going through the pain barrier.”

By Lora Jones
Business reporter, BBC News

UK to focus crypto rules on stablecoins, says minister

virtual coins cryptocurrency

LONDON (Reuters) – Britain will initially focus on regulating stablecoins rather than the broader cryptocurrency market given the risk of too little competition, UK financial services minister John Glen said on Tuesday.

Facebook’s move in 2019 to introduce its own stablecoin Diem, then known as Libra, raised concerns among governments and central banks that a major payments competitor could emerge overnight.

“We need to manage risks to competition,” Glen told a City & Financial conference.

“There is the potential for some firms to swiftly achieve dominance and crowd out other players, due to their ability to scale and plug into existing online services,” Glen said.

“We believe the case for intervention in the wider cryptocurrency markets is less immediately pressing.”

Stablecoins such as the planned Diem – currently seeking approval in Switzerland – are designed to avoid the volatility typical of cryptocurrencies like bitcoin, making them in theory more suitable for payments and money transfers.

Glen said stablecoins have become the largest component of cryptocurrencies by trading volume, and while no globally systemic player has emerged so far, this could change rapidly.

The largest stablecoin by market capitalisation, Tether, is a fraction of the size of bitcoin, and is little used for commerce.

Britain will not hold back innovation or be protectionist when it comes to using distributed ledger technology, which underpins cryptocurrencies such as bitcoin, Glen said.

“We have a once-in-a-generation opportunity here to make vast strides in the efficiency of financial services, and ultimately benefit consumers and the economy as a whole,” he said.