Leicestershire Chamber of Commerce

CHAMBER NEWS

Please note that the Chamber of Commerce will be closed on Wednesday 24 December 2003 from 12.00pm and will reopen on Monday 5 January 2004. There will also be a break in the regular scheduling of the Good Morning Leicestershire with the next issue coming out in the New Year.

Make it a prosperous new year for 2004 by reviewing your energy supply via the free Chamber Utility Auditing service.

Gas and electricity prices have soared over the past 12 months and further cost increases are in the pipeline. Powergen has already announced price rises of 6.9% on electricity and 4.9% on gas for its ‘Evergreen’ customers, which will come into effect from 5 January 2004.

Warns Paul Backx, Managing Director of Utility Auditing Ltd, which provides the Chamber energy service: “Gas prices have hit a three year peak making UK gas among the most expensive in the world. In the past 12 months, we have also seen electricity prices rise by up to 30% due to limitations on supply. The days of cheap energy are no more and it is more important than ever for companies to shop around to find the best deal.”

For more information contact Vicky Rogers on t. 0116 204 6601 or email rogers.v@chamberofcommerce.co.uk

From: David Kern, Economic Adviser to the BCC

• Additions to the report: Starting with this issue, we are extending our forecasting horizon to 2005. The table on page 4 now includes forecasts for UK construction output.
• UK GDP growth was 0.7% in Q3; it is forecast at 2.0% in 2003, 2.6% in 2004, and 2.4% in 2005, after 1.7% in 2002. Growth remains stronger than in the Euro area.
• UK public finances are worsening sharply. Public Sector Net Borrowing (PSNB) is forecast to total £38bn in 2003-04, £11bn above the Budget estimate.
• Tax rises of 10bn-15bn will be needed in the next 2-3 years, to avoid breaking the fiscal rules; the first instalment may occur in the next Budget.
• Changing the inflation target (and basing it on the HICP index used in the EU), will make it difficult to explain policy and may unsettle the financial markets.
• UK Base rate is set to increase gradually over the next year, to 4.25%-4.50% by end-2004. Gilt yields will edge up further, but less sharply than in recent months.
• Sterling will strengthen against the dollar and weaken against the euro in the next few months. After mid-2004, the pound is likely to ease against most currencies.
• An early referendum on UK Euro entry is extremely unlikely. A decision will almost certainly be postponed until after the next General Election at the earliest.
• UK risks: strikes, higher taxes & interest rates, pensions shortfalls, low skills, low productivity, housing bubble, weak manufacturing, large external deficit.
• The cyclical global recovery, led by the US, is gathering pace. Growth is set to strengthen in the next 6-9 months, but then slow towards end-2004 and in 2005.
• Terrorism threats & trade tensions have worsened. Other factors likely to dampen recovery are debt, huge budget & external deficits, and currency instability.
• US Q3 GDP growth was revised upwards, from 7.2% to 8.2% annualised. GDP forecasts were upgraded, with 2004 growth at 4.0%.
• US non-farm payrolls rose 126,000 in October; August and September job figures were revised upwards. Initial jobless claims fell to their lowest since early-2001.
• Euro area GDP quarterly growth was 0.4% in Q3, after -0.1% in Q2 & nil in Q1.
• Germany, France, Italy, and the Netherlands have all grown in Q3 2003, after Q2 declines. Euro area growth will strengthen in 2004, but will be limited by inadequate reforms and unduly tight fiscal & monetary policies.
• Japan’s GDP grew 2.2% annualised in Q3 2003, below the revised 3.5% Q2 growth, but much higher than expected. Growth forecasts have been raised. But bad debts, deflation, and adverse demographic trends will limit long-term growth.
• US growth will remain stronger than in the Euro area and Japan.
• Asia’s economic status will strengthen further, driven by a rapidly expanding China and a gradually strengthening India.
• Official interest rates are past their lows. In the US and the UK, official interest rates will rise gradually during 2004. The UK saw already the first increase. In the Euro area, there is a case for a cut, but rates will rise in H2 2004.
• Longer-term bond yields will also rise, but more modestly than in recent months.
• Given the concern over the huge US external deficit, further dollar falls (mainly against the yen & euro) can be expected over the next 6-9 months.
• China will resist a large (15%-20%) revaluation of its currency, the renminbi; but a gradual (5%-10%) strengthening is highly likely in the next 12 months.

UK background: UK GDP quarterly growth in Q3 2003, provisionally estimated at 0.6%, was upgraded to 0.7%; this follows 0.6% growth in Q2; Year-on-year growth in Q3 was upgraded from 1.9% to 2.0%, after 2.0% in Q2 and 1.8% in Q1. We retain our forecast of 2.0% growth for 2003 as a whole, but we upgrade from 2.5% to 2.6% our GDP forecast for 2004. Recent and prospective UK growth figures remain stronger than in the Euro area, but the imbalances in the economy have widened. Household spending grew by 0.7% in Q3, while investment fell 1.3%, and exports virtually stagnated.

UK public finances have worsened further. We continue to forecast that Public Sector Net Borrowing (PSNB) will total £38bn in 2003-04, £11bn above the Budget estimate. Tax rises of some £10bn-£15bn will be needed in the next 2-3 years, to avoid breaking the Chancellor’s fiscal rules. As expected, UK Base rate rose to 3.75% early in November, and further modest increases are expected in the next 12 months. Current forecasts, while stronger than earlier in the year, still point to below-trend GDP growth in 2003, followed by stronger (but not spectacular) expansion in 2004. The UK labour market remains robust, with employment near record high levels. But the economic upturn is over-dependent on an upsurge in public sector spending, recruitment, and pay. The UK economy faces serious risks: higher taxes & interest rates, worsening strikes, pensions shortfalls, housing bubble, low skills, low productivity, weak manufacturing, large external deficit. But the short-term outlook remains benign, with tolerable growth, low inflation, low interest rates, and high employment.

The Global Economy: The cyclical global recovery, led by the US, is gathering pace. Growth is set to strengthen in the next 6-9 months, but then slow towards end-2004 and in 2005. New acts of terrorism, and worsening trade tensions (between the US and the EU on steel, and between the US and China on textiles), have unsettled the markets, and remain serious threats. Other factors set to dampen recovery are too much debt, huge budget & external deficits, and currency instability.

US GDP Q3 GDP growth was revised upwards, from 7.2% to 8.2% annualised. In spite of the terrorist acts in Istanbul and the worsening trade tensions, US GDP forecasts were upgraded, with 2004 growth at 4.0%. Some forecasters expect even higher growth next year. US non-farm payrolls rose 126,000 in October, while August and September job figures were revised upwards. US initial jobless claims fell to their lowest level since early-2001. Euro area GDP quarterly growth was 0.4% in Q3, after -0.1% in Q2 and nil in Q1. Germany, France, Italy, and the Netherlands have grown in Q3, after Q2 declines. Euro area growth will strengthen in 2004, but recovery will still be limited by inadequate reforms and unduly tight fiscal & monetary policies. Japan’s GDP grew 2.2% annualised in Q3 2003, below the revised 3.5% Q2 growth, but much higher than expected. Growth forecasts have been raised. But bad debts, deflation, and adverse demographic trends will limit long-term growth. US growth will remain stronger than in the Euro area and Japan. Asia’s economic status will strengthen further, driven by a rapidly expanding China and a gradually strengthening India.

Official interest rates are past their cyclical lows. In the US and the UK, official interest rates will rise gradually during 2004. The UK saw already the first increase. In the Euro area, there is a case for a cut, but rates will rise modestly in H2 2004. Longer-term bond yields will also increase, but more modestly than in recent months. Given the concern over the huge US external deficit, further dollar falls (mainly against the yen & euro) can be expected over the next 6-9 months. A collapse in the dollar, although unlikely, would be very damaging. China will resist a large (15%-20%) revaluation of its currency, the renminbi; but a gradual (5%-10%) strengthening is highly likely in the next 12 months.

Base rate and sterling: At its November meeting, the MPC raised as expected its key interest rate to 3.75%. Eight members supported the increase, and one voted for a “no change”. The MPC’s subsequent comments regarding its future intentions were ambivalent. While stressing the “modest” nature of the increase, the Committee indicated that the housing market, and consumer spending & borrowing, are still too to strong and may eventually threaten the inflation target. The “hawkish” tone of the Bank of England’s Inflation Report heightened fears that the pace of interest increases will accelerate, but the markets have become more relaxed following the publication of the full minutes of the MPC meeting. On balance, increases in official interest rates over the next year are likely to be gradual and modest, with the key MPC rate rising to 4.25%-4.50% during 2004. Gilt yields will edge up further, but by less than the sharp increase seen in recent months.

The changeover in the inflation target, and basing it on the HICP index used in the EU, will probably be announced by the Chancellor in his 10 December pre-Budget Report. The move will initially complicate the MPC’s job, and make it difficult to explain policy. If, as expected, the new HICP target is set at 2%, the switch will have the effect of replacing an inflation measure that is above-target (RPIX was 2.7% in October) with one that is well below-target (HICP was 1.4% in October). The exclusion of housing costs from HICP, which is the most important factor accounting for the difference between the two indices, is clearly questionable in the UK.

Sterling is set to strengthen against the dollar and weaken against the euro in the next few months, After mid-2004, the pound is likely to ease against most currencies. An early referendum on UK Euro entry is extremely unlikely. A decision will almost certainly be postponed until after the next General Election at the earliest.

UK GDP: Quarterly GDP growth in Q3 was revised upwards, from 0.6% to 0.7%, in 2003, after 0.6% in Q2. Year-on-year GDP growth in Q3 was upgraded from 1.9% to 2.0%, after 2.0% in Q2 and 1.8% in Q1. The higher GDP estimates for Q3 still point to a mediocre UK economic performance, though stronger than previously expected. GDP growth is forecast to remain at 2.0% for 2003; but my growth forecast for 2004 is upgraded to 2.6%, up from 2.5% in the previous forecast. In 2005, growth is forecast to slow back to 2.4%. 2003 GDP growth will still be below trend for the year as a whole, after below-trend growth in both 2001 and 2002; while growth in 2004 and 2005 is expected to just match (but not exceed) trend. UK growth is set to remain higher than in the Euro area (0.5% in 2003, 1.8% in 2004, and 1.7% in 2005). The April Budget forecast for GDP growth (a range of 2.0%-2.5% for 2003, and a range of 3%-3.5% for 2004) could just be met in 2003, but is still too high for 2004.

Household consumption, after slowing sharply in Q1 2003, has risen strongly in Q2 and Q3. Quarterly growth was 0.7% in Q3, after 0.7% in Q2; annual growth was 2.5% in Q3, after 2.4% in Q2. The housing market and personal debt have remained surprisingly buoyant, and this has led to the MPC’s recent decision to increase interest rates. Even so, while accelerating slightly next year, household consumption growth is likely to slow overall in annual terms, from an average of almost 4% per annum in the five years to 2002, to 2.4% in 2003, 2.7% in 2004, and 2.5% in 2003, as the housing market cools and the higher personal debt burden fosters greater caution.

% Change Year on Year

UK main sectors: Service sector quarterly growth accelerated to 0.8% in Q3 2003, after 0.2% in Q2 and 0.5% in Q1; year-on-year services growth was 2.3% in Q3, after 2.3% in Q2 and 2.5% in Q1. In spite of the Q3 upsurge, service sector figures over the past 18 months were well below the sharp annual rises recorded in 2000 and early in 2001. Looking ahead, the service sector, while remaining stronger than manufacturing, is forecast to expand at a moderate pace, with annual average growth of 2.4% in 2003, 2.8% in 2004, and 2.5% in 2005.

Construction output, after rising 7.5% in 2002 as a whole, fell in Q1 2003; but Q2 quarterly growth accelerated sharply to 4.4%, while Q3 saw strong quarterly growth of 2.5%. Looking ahead, construction growth is likely to expand strongly in the next 2-3 years, in line with the upsurge in Government spending, with annual average growth of 5.7% in 2003, 8.0% in 2004, and 7.0% in 2005.

Manufacturing output, after falling 0.6% in August, fell a further 0.2% in September, worse than expected. In the three months July-September 2003, manufacturing was flat, compared with the previous three months, and 0.4% lower than in the same period in 2002. To put the recent figures in perspective, after falling 1.3% in 2001 and 3.6% in 2002, manufacturing output recorded a further year-on-year fall of 0.3% in the period January-September 2003. Output is still 5% below its 2000 level. Engineering (+1.1%) recorded the best year-on-year figure in July-September, while metals (-3.0%) recorded the worst year-on-year figure.

Manufacturing employment is set to decline further. But, after a nasty and prolonged recession, manufacturing output is now stabilising and is likely to recover gradually over the next 12-18 months. However, even if we make optimistic assumptions about short-term prospects, manufacturing output is forecast to register zero growth in 2003 as a whole, and then grow by only 1.9%% in 2004. Both output and profits should benefit from a weaker pound against the euro, but the recovery will be fragile.

200020012002200320042005GDP3.8%2.1%1.7%2.0%2.6%2.4%Household Consumption4.4%3.1%3.6%2.4%2.7%2.5%General Government1.9%1.7%2.4%3.8%4.6%5.0%Investment3.6%3.6%1.8%1.5%2.0%2.3%Exports9.4%2.5%-0.9%-1.9%1.0%2.3%Imports9.1%4.5%3.6%0.4%2.6%3.6%Manufacturing Output2.4%-1.3%-3.6%0.0%1.9%2.2%Services Output4.3%2.6%2.3%2.4%2.8%2.5%Construction Output1.3%3.4%7.5%5.7%8.0%7.0%PSNB Fin.Years %GDP-1.6%0.1%2.1%3.4%4.0%4.5%Current Account-%GDP-2.1%-1.8%-1.8%-2.1%-2.2%-2.1%PSNB Fin. Years £bn-15.40.722.538.046.854.9Current Account £bn-19.8-18.0-19.0-23.5-25.0-25.0

UK labour market: Claimant count unemployment was 926,900 in October (close to the consensus forecast), down 3,300 from the revised September figure, and down 15,300 over the year. On the wider ILO measure, unemployment was 1,481,000 in July-September, up 12,000 on the previous three months but down 70,000 on the same period a year ago. The jobless rate was 3.0% (October) on the claimant count, and 5.0% (July-September) on the Labour Force survey (LFS) measure. The employment level was 28,151,000 in July-September, up 28,000 on the previous three months, but up 309,000 over the year. The working age employment rate was 74.6% in July-September, up 0.3 percentage points from a year earlier. Manufacturing employment was 3,480,000 in July-September, 121,000 lower than a year earlier and the lowest level since 1984. The jobless rate (LFS measure) is lowest in the South West (3.2%), Eastern region (3.9%), and the South East (3.9%). Regional jobless rates were highest in London (7.1%), the North East (6.7%), and the West Midlands (6.0%).

Average earnings growth was 3.6% in July-September, compared with a revised 3.4% in June-August, slightly above expectations. Private sector earnings growth rose to 3.1% in July-September. Public sector earnings growth remained at 5.6%, and the large gap over the rise in private sector earnings narrowed slightly. Looking ahead, unemployment (which is a lagging indicator) may increase slightly in the next 6-9 months, due to earlier below-trend GDP growth. But the labour market remains resilient. The upsurge in public spending, and heavy public sector recruitment, will sustain strong public sector wage settlements and could trigger labour militancy. I expect earnings growth to accelerate slightly in 2004, towards 4%-4.5% per annum.

Inflation: The year-on-year rise in the all-items retail price index (RPI) was 2.6% in October, down from 2.8% in September. The ‘underlying’ measure of inflation (RPIX), which the Government is now targeting and excludes mortgage interest, was 2.7% in October, down from 2.8% in September. The October inflation figures were below market expectations, but RPIX has now been above the 2.5% official target for 12 consecutive months. Annual inflation on the Harmonised Index of Consumer Prices (HICP), the international inflation measure used in the EU, that is set to replace RPIX shortly as the official policy target, remained at 1.4% in October; and the gap between RPIX and HICP narrowed slightly further, to 1.3%. The main downward price pressures in October stemmed from housing (depreciation), household services, and leisure services. The main upward price pressures stemmed from motoring (car prices), alcohol, and fuel & light.

Goods price inflation edged up from 0.5% in September to 0.6% in October, and was in positive territory for the past nine months. Services price inflation slowed further, from 3.6% in September to 3.4% in October. The gap between goods and services inflation narrowed further, to 2.8%, the lowest since March 2001. High Street prices remained in negative territory, and margins are under pressure. In the three months August-October, High Street prices were 0.7% lower than a year earlier. Looking at UK inflation prospects, the RPIX measure is likely to ease slightly over the next few months, as the housing market cools and oil prices ease. But the HICP measure (which excludes housing inflation) should edge up, as the gap between HICP and RPIX narrows further.

Contact details: David Kern, Kern Consulting
Economic Adviser to the BCC
Tel: 020 8904 6293 E-mail: david.kern@btinternet.com

LEGISLATIVE NEWS

New laws to prevent discrimination in the workplace on grounds of sexual orientation or religion have now come into force this month. The Sexual Orientation regulations became law in Great Britain from 1st December and The Religion or Belief regulations on the 2nd December.
For more information on this legislation, visit www.dti.gov.uk/er/equality

From the 1st December, it has become an offence to use a hand-held mobile phone while driving.
For more information, visit www.dft.gov.uk or for enquiries, call 020 7944 8300

The Equal Opportunities Commission's new revised Code of Practice on Equal Pay came into force on 1 December 2003. The code, which explains employers' obligations on equal pay, has been revised to take account of new law and recent equal pay case decisions. It provides practical guidance on how to ensure pay is determined without sex discrimination. It is aimed at employers. The code is admissible in evidence in any proceedings under the Sex Discrimination Act 1975 or the Equal Pay Act 1970. This means that, while the code is not legally binding, an employment tribunal may take into account an employer's failure to act on its provisions.

The new revised code includes information on equal pay for pregnant women and women on maternity leave, grievance procedures, the equal pay questionnaire and equal pay reviews.
For more information, visit www.eoc.org.uk
NEW BILL TO PROMOTE ‘CLEANER, GREENER POWER’ IS PUBLISHED
A new Bill to promote ‘cleaner, greener power’ and competitive and reliable energy supplies for now and generations to come has been published. The Energy Bill will implement a range of commitments made in the Energy White Paper: Our energy future – creating a low carbon economy, published in February, based upon environmental protection, energy reliability, competitive markets and affordable energy for all.
For more information on its impact, visit www.publications.parliament.uk/pa/pabills.htm

Employment Relations Minister, Gerry Sutcliffe, has confirmed that the bill will be amended to allow unions to expel or exclude racist activists and others whose political behaviour is incompatible with trade union membership. The Bill, announced in the Queen's Speech last month, is the result of an evidence-based review of the Employment Relations Act 1999 with the publication of the Government's conclusions. The Bill would also implement the TUC/CBI framework agreement on Information and Consultation, giving employees the chance to be
informed and consulted on management decisions affecting their future, including: employment prospects; changes in work organisation or contractual relations, including redundancies and transfers; and economic prospects for their industry.
For further information, visit www.dti.gov.uk

Minister for Work Des Browne has set out an agenda for action to help business deal with the costs of Employers' Liability Compulsory Insurance. Mr Browne has said that the Government has recognised that too many businesses have faced steep price increases, late renewals and premiums that fail to reflect their health and safety record. This has been reflected across the UK with representations being made about the availability of affordable cover in Northern Ireland, Wales and Scotland. The Government is now taking action to improve conditions. The government has been facilitating short-term improvements and helping stakeholders tackle the difficult long-term issues. Work has also been carried out and will continue with businesses and the insurance industry to find workable solutions. This partnership is already showing promising signs that it is benefiting business.
For more information, visit www.dwp.gov.uk

The Queen's speech announced plans for three new pieces of legislation that will be of particular interest to Employers:

The Disability Discrimination Bill:
This will extend the rights and opportunities of disabled people "responding to a review of the law relating to disabilities".

Review of the Employment Relations Act 1999:
This new legislation will strengthen workers' protection from dismissal where the worker is dismissed after lawfully striking; it will also extend protection against dismissal for those seeking to work flexibly - by reducing the qualifying period of employment to bring an unfair dismissal claim from one year to six months in these circumstances.

The Pensions Bill:
This will include legislation establishing the Pension Protection Fund which will protect (up to a limit still to be decided) employees' pensions where their employer goes bust.

ITV’s Jonathan Dimbleby Programme is looking for members of the public to put forward their thoughts and experiences on issues related to the present transport systems to Alistair Darling MP, Secretary of State for Transport on Sunday 14th December or simply to listen to a lively debate. The programme is recorded at lunchtime in Central London. If you are interested in joining the studio audience, or for further information, please contact:
Elisabeth Kerr on 020 7261 3784 or email at: Elisabeth.Kerr@granadamedia.com

CHAMBER EVENTS

Date: 14th January
Time: 07.30 – 09.30
Venue:Leicester Tigers Rugby Ground
Cost: £17.63 one price inc. breakfast

Today’s business environment is more competitive and cost conscious than at any time in the last ten years and, by necessity, we have to spend more time away from the office attending appointments, events and training. This event will look at how, using the latest technologies, we can continue to communicate and do valuable work whilst on the move.

Sponsored by Blue Arrow
Date: 15th January
Time: 18.00 – 20.30
Venue:Leicestershire County Scout Centre, Blaby
Cost: £20.00 Members, £30.00 Standard

Hosted by the Leicestershire branch of the UK Scout Association this event will give members an opportunity to network, exchange company literature over a glass of wine and gain an insight into the valuable work of this respected organisation.

Date: 22nd January
Time: 18.00 – 20.30
Venue:De Montfort University, Leicester
Cost: £18.00 one price only inc. a glass of wine and buffet

Join Integra and Business Women’s Link at De Montfort University for an informal but informative evening discovering the work of the university’s Innovation Centre and services for business whilst enjoying a glass of wine, a networking buffet and an exhibition of fashion, textile and graphic design.

In conjunction with Freethcartwright LLP
Date: 28th January
Time: 07.30 – 09.00
Venue:Leicester Tigers Rugby Ground
Cost: £23.50 Members, £33.50 Standard

The Chamber’s Employment Law Seminars are very popular, helping to keep businesses up-to-date on important legislation. This event will look at the email policies and procedures that employers should put into place, future legislation including updates and tip-offs on forthcoming changes and guaranteed ways to avoid Employment Tribunal claims.

Leicestershire Chamber networking events are sponsored by Blue Arrow.

For more details or to book onto this event you can book online by logging on to our website www.chamberofcommerce.co.uk or contact Kam Atker on 0116 2046614 or email at atker.k@chamberofcommerce.co.uk

OTHER NEWS

‘BUSINESS ISSUES’ MAGAZINE READERSHIP SURVEY

Business Issues, the bi-monthly business magazine is regarded by many in Leicestershire as a vital communication tool for being kept up to date with local business activity and opportunities. Serving as a forum for local businesses, it aims to bring the latest business news to you as and when it happens. This is why we have decided to carry out a readership survey to gather the views from you – our readers. Knowing what you want will help us to deliver a business publication to the highest standard and one which caters for your business needs. As an added bonus, we’re also offering you the chance to win a prize of a meal for 2 (to the value of £100) to be taken at the award winning Opera House Restaurant, Leicester. All you need to do is complete and return your survey. All returned entries will be placed into a draw where three winners will be selected, each winning £100 to be spent at the Opera House – Remember, your surveys must be returned by the closing date of 19th December 2003
Business Issues is jointly sponsored by: Leicestershire Chamber of Commerce & Industry, Business Link for Leicestershire, Learning Skills and Council Leicestershire, Leicestershire County Council, Leicester Shire Economic Partnership and Leicester Shire Promotions Ltd
Your views are very important to us and we look forward to hearing from you soon.

Please CLICK HERE to access the survey for you to print off, fill out and send back.

November saw the beginning of some original and controversial advertisements hitting the streets of Leicester city centre. Posters saying things like ‘Boring, Boring Leicester’ or ‘Leicester – Nothing to Shout About’. The initiative is the first part of the Leicester Revealed place marketing programme, which seeks to transform perceptions of the city and county over the next few years.

Research on the perceptions of Leicester show the city to be virtually invisible in many people’s eyes. Worse still, local people seem fond of knocking the place and are cynical about its future prospects. Without greater confidence and civic pride, it will be difficult to convince the outside world that Leicester is a place in which to business or visit. Leicester Shire Promotions decided to tackle these negative perceptions head-on and it hopes, by making public some of the comments made about the city, to get people talking and to start defending it for themselves. The advertising campaign also reveals a new mark for Leicester, Leicester with an exclamation mark stamped over the letter ‘I’. The use of the exclamation mark suggests there’s more to Leicester than meets the eye.

The campaign has already had a significant impact with considerable media coverage, not just in local print and on local radio broadcasts. The campaign has been featured in the Daily Telegraph, The Observer, ITV’s Des and Mel Show, on Radio 2 and Radio 4 and even on Canadian and South African state radio. In a parallel development, Leicester Shire Promotions sponsored an eight page supplement in The Guardian, which features some of the many diverse strengths of the city. The challenge will now be to sustain the momentum and to get people actively standing up for Leicester and Leicestershire.

One of the ways in which the Leicester Revealed vision will be delivered is through a series of themed years which highlight the existing and emerging strengths of the city and county. Taste Leicester! is the first in the series and will be followed by Create Leicester! in 2005 and a further five themed years to take Leicestershire on a journey to 2010.

Taste Leicester!, launching in January 04, will signpost people to a diverse range of experiences that challenge them to ‘taste’ what Leicester already has to offer and give a ‘flavour’ of the vibrancy and creativity of the city. The programme includes events and activities which celebrate heritage, science, education, food, fashion, thought and community as well as festivals and existing arts programmes. The year will also be punctuated by some major new events for Leicester like the Taste Leicester! Expo (1-4 July 04). Taste Leicester! supports the belief that all sectors - public, business, voluntary, education and community - play a vital role in the perception of the city and county and its potential for transformation and regeneration. Taste Leicester! has a very direct relationship with the Leicester Revealed campaign, making visible the hidden wealth of assets which the county has to offer its citizens and tourists.

For more information on Leicester Revealed and copies of The Guardian supplement, please contact Sam Naik at Leicester Shire Promotions on sam.naik@l-p-l.com.

No such thing as a free lunch? Maybe not – too many of us are too realistic these days. But thanks to a new initiative at Leicester Business School, De Montfort University, there is such a thing as free (or at least very inexpensive) management consultancy.
As an alternative to the traditional theory-based dissertation at the final stage of the MBA programme, Leicester Business School now offers participants the option of an In-company Project. The school is now seeking more partner companies and organisations who could offer a suitable project and benefit from a fresh approach to a management challenge…
It works similarly to standard placement schemes. The employer provides the project, a mentor and a base within the host organisation between June and September. The business school provides candidates for the project, academic supervision and associated PR for the host organisation (if desired). But there are two big differences between this and your average scheme. The end result for the employer should be a strategic solution to a real and current challenge, potentially with long-term benefits. And the calibre of the participants - you have to have operated at managerial level before embarking on an MBA, so with the text book theory comes practical experience. These aren’t your average placement students.
So there are no catches, no long-term commitments and certainly no financial investment. Simply an opportunity for the MBA participants to gain more applied experience, for your organisation to benefit from some of the fruits of our academic input and for the business school to enhance its links with regional employers.

If you would like to discuss the opportunities further, please contact Jan Worth, Graduate Placement Co-ordinator, on Tel: 0116 250 6332 or email jsworth@dmu.ac.uk.

AS THE HOLIDAY season approaches a local firm of accountants warns employers and employees to beware of potential tax liabilities which could be lurking within those festive gifts and parties.
“It is traditional at this time to give gifts to clients and staff”, said Marcel Grech Marguerat, senior tax partner at chartered accountants MacIntyre Hudson. “Gifts to customers are not taxable for the recipients but they are an allowable business expense provided that the total cost of gifts to any one person in any year does not exceed £50 and the gift bears your corporate branding. However, gifts of food, drink, tobacco or vouchers are not deductible expenses. There are also VAT implications so beware!”
“Giving vouchers to employees in particular can be a tax nightmare. National insurance is due via the payroll at the time of giving the voucher and for tax purposes they need to be reported on forms P9D or P11D. It is possible however, for the employer to pay the tax for the employee via a PAYE settlement agreement.”

Marcel continues “The annual Christmas bash is another area to take care. As long as the cost does not exceed £150 per head there is no taxable benefit. However should the cost exceed this amount by just 1p the entire cost of the function becomes taxable. Remember this limit is for all functions throughout the year not just the Christmas party. Therefore if 2 events were held at a cost of £80 a head, for each employee attending both the entire cost of the 2nd event would be taxable not just £10 above the £150 limit. VAT is also recoverable on the costs relating to the employees but not on their guests although there are ways of improving the position.”
“Most employees wouldn’t thank you for a gift which landed them with an unexpected tax bill so it makes sense to plan your festive generosity effectively to make sure the seasonal spirit remains intact!”

Contact: Marcel Grech-Marguerat, Senior Tax Partner, MacIntyre Hudson, t: 0116 289 624011

Second Class – Thursday 18th December 2003
First Class – Saturday 20th December 2003
SPECIAL DELIVERY – Normal next day delivery items posted up to and including Tuesday 23rd December.

Last collection will be on Wednesday 24th December 2003 but will not arrive to destination until after the Xmas period.