UK trade deficit narrows but manufacturing weakens

An increase in oil, chemical and aircraft exports helped the trade deficit in goods to fall by more than £2bn to £7.72bn, the ONS said. Fewer imports of aircraft and ships also boosted the figures, it said.Manufacturing output rose by 0.3% in December, less than the 0.6% predicted. The wider measure of industrial output rose by 0.4% in the month.

However, the ONS said the weaker-than-expected growth was not enough to change the estimate of GDP growth in the fourth quarter of 2013, which was 0.7%.

When services were included, the overall trade deficit narrowed to £1bn in December. This was down from a deficit of £3.6bn the month earlier and also the smallest deficit since July 2012.

'Even picture'
Despite the weaker-than-expected manufacturing figures, Lee Hopley, chief economist at the EEF manufacturers' organisation, remained upbeat.

"Manufacturers had a strong finish to 2013, but more encouraging, are the indicators we've seen since the start of the year which suggest that positive trend has rolled into the early part of 2014.

"Our expectation is that we see another quarter of 0.6% expansion in the three months to March, with a pretty even picture across sectors.

Ms Hopley added that export demand would "gather pace" through the year, and the official data would follow.

The UK's economy grew last year at its fastest pace since 2007, expanding by 1.9%.

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Grangemouth plant shutdown leaves government fighting to save 800 jobs

Petrochemicals workers will lose their jobs after abrupt closure, with 2,600 refinery employees and contract staff at risk

The government is scrambling to save 800 jobs at the Grangemouth petrochemicals site in Scotland after its owner, Ineos, abruptly closed the plant in a rancorous industrial dispute.

As the energy and climate change secretary, Ed Davey, said that "all efforts" would be made to rescue the plant, Ineos also refused to rule out closing the oil refinery on the same site.

Workers were given the grim news at a meeting with Ineos's chairman, Calum MacLean. Ineos had given the workforce until Monday evening to accept its demands for radical changes to terms and conditions but the company concluded there was not enough support.

Its decision means that up to 800 petrochemicals workers will lose their jobs, and it threatens the positions of some 600 or more employees at the refinery plus 2,000 contract staff.

Staff reacted with shock to the news, as Ineos followed through on its warning that the threat of closure was not a bluff.

The fate of the giant plant on the Firth of Forth has far-reaching implications for Scotland and the UK. Grangemouth is Scotland's biggest manufacturing business, its refinery supplies most of its fuel and the petrochemicals plant produces plastics used in industries ranging from cars to packaging.

In an urgent question on Grangemouth in parliament, Davey told MPs repeatedly that the government wanted the plant to stay open if at all possible. It would still consider a business case to provide investment to help keep the plant running.

"We will be using all our efforts through the [Business] department and UKTI [UK Trade and Industry body] to assist should we need to have a buyer for the petrochemical plant," he said.

However, Ineos has already warned that the refinery – currently shut down because of the dispute – could be closed permanently if the Unite trade union did not agree to a no-strike deal.

Davey also confirmed that detailed contingency plans had been drawn up to protect firms and customers from running out of fuel and chemical supplies. He met MPs later to discuss the issue in more detail.

Downing Street has insisted the closure of the Grangemouth refinery would not pose a threat to fuel supplies, after the AA warned it could hit petrol prices. The prime minister said in an answer to a parliamentary question from the Labour MP Tom Watson that ministers had discussed the closure during Cobra meetings.

Downing Street dismissed speculation that the plant could be nationalised, saying it was a matter for unions and owner to resolve. The prime minister's spokesman said it was disappointing that the petrochemicals side of the plant had closed and called on "both parties" to "continue their dialogue" over the future of the refinery.

The closure of the petrochemicals plant follows a standoff between Ineos and Unite, which represents about 1,100 of Grangemouth's permanent employees as well as many contract workers. Many businesses – from the Rumbling Tum burger van near the site to cab firms, pubs and hotels – rely on trade from Grangemouth.

Gordon Alexander, who owns Grange Radio Cabs, said closure would devastate local businesses. "Local shops and local snack bars would definitely go out of business. We do a lot of executive work for them and if they were to close I would probably lose about half of my 50 cabs."

Edmund King, the president of the AA, warned that petrol prices could rise if Grangemouth and other European refineries closed down.

"The AA is concerned with the impact of this refinery closure," he said. The European commodity trading houses have been predicting the loss of five to six refinery plants over the next two years.

"In March to April of last year, with the closure of refineries and the impending start of the US motoring season, wholesale prices went up by 20%, adding 8p to 10p to a litre of petrol. The spike was short-lived because US drivers cut back and some of the refineries were bought. However, the damage was done and a new UK petrol record [142.48p a litre] was set."

Bitter dispute

The announcement follows the passing of a deadline on a survival plan put to employees, which asked them to accept changes to pensions and other terms and conditions.

The Unite union said about 680 of the site's 1,370-strong workforce had rejected the company's proposals, which include a pay freeze for 2014-16, removal of a bonus up to 2016, a reduced shift allowance and ending of the final-salary pension scheme.

Ineos said its owner, Jim Ratcliffe, and other shareholders met on Tuesday to study the response from the workforce to their survival plan, and wanted the employees to be the first to know of any decision the company made.

A dispute over pay and conditions at the oil refinery remains unresolved.

Unite has accused the company of "playing Russian roulette" with the future of Grangemouth, the biggest industrial site in Scotland, and is backing any efforts by the Scottish government to find a new buyer for the oil refinery and petrochemical complex.

Ineos sent a letter to workers last Thursday asking them to indicate their rejection or acceptance of the plan.

It said those who supported the survival plan would receive a transitional payment of up to £15,000.

The two sides have been embroiled in a bitter dispute for weeks, initially over the treatment of the Unite convener, Stephen Deans, who was involved in the row over the selection of a Labour candidate in Falkirk, where he is chairman of the constituency party.

He was suspended, then reinstated, then was subject to an internal investigation, which is due to report on Friday.

The dispute has since widened to the future of the entire site, with Ineos warning that it would close without investment and changes to pensions and other terms and conditions.

The company said the plant, which has been shut down since last week because of the dispute, was losing £10m a month.

Ineos had said it was ready to invest £300m in Grangemouth, but only if workers agreed to the new terms.

Article Source : http://www.guardian.co.uk

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Cider's cool new image to lead the way in British export push

No longer the tipple of teenagers and tramps, quality English ciders are now an integral part of the government's plan for economic growth

It was, in the words of one industry executive, the drink of "students, tramps and the Wurzels". But the perception and popularity of cider has been transformed and now the government wants to get in on the act.

Defra and its agency UK Trade and Investment (UKTI) have published a plan to improve British exports – and cider seems to be its trump card. "As one of the world's leading cider producers, the UK is well placed to leverage this growing opportunity," the plan says. "Worldwide, cider sales are rising rapidly and grew by over 50% in both the USA and Australia in 2011-12."

The drink's place in what David Cameron calls the "global race" for growth is a remarkable turnaround for a product whose appeal was once limited to under-age drinkers and those seeking cheap strong booze.

Paul Bartlett of the National Association of Cider Makers said he was delighted the government was waking up to "a gem", and hoped that with promotion and trade missions, cider could enjoy some of the success of Scotch whisky. He added: "There's growth in Canada, the US, Australia and Scandinavia. And there are pockets in Asia, where hopefully the government are going to help. We are looking at Vietnam, Korea, China. It's the holy grail to crack those markets.

"The American beer market has changed dramatically with the rise of craft beers. Consumers are experimenting with different flavours, and looking at the provenance of their drinks. Cider is jumping on the back of that, offering a natural background, the direct link with apples. And men and women both like it, which is important because more drinking is in mixed groups."

Henry Chevalier of Suffolk's Aspall Cyder pointed out that cider is being sold at the top end of the market in America. Restaurants, he said, include Aspall cider on their wine lists, at $26 a bottle, considerably more than its £2.59 UK price tag. Waiters show the label to drinkers before offering a taste, and they store it in ice buckets.

Billboards advertising English cider varieties have appeared in Sydney, exploiting a growing awareness of the drink. And British farmers are waking up to the potential and turning over land to apple orchards.

Chevalier said the change in cider's fortunes came when Bulmers' Irish rival, Magners, launched in Britain in 2005. The following year brought a hot summer and a multi-million pound Magners marketing campaign to encourage serving cider over ice made it the trendy new drink.

But there were other factors in play. "If you go back 15 years, the image was tramps, students and the Wurzels. It was very cheap, it wasn't the best quality and there was a vicious price war going on between Bulmers and Taunton. But when Bulmers owner Scottish & Newcastle was bought by Heineken [in 2008], it was the first time an internationally minded company got hold of a big cider brand. The parochial view was that there was nowhere to sell cider except England. Heineken disagreed, and others have followed."

Article Source : http://www.guardian.co.uk

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