Brexit and The B.A.R.

1. Brexit and The B.A.R.

2. A bit about me • 45 years experience in the moving industry, blue and white collar involvement – Porter to Director • Experience in small family firm and a multi branch PLC • Board level accountability and responsibility for budget of +£21m • Active participant in B.A.R for many years • Chair of CMG 2007 - 2009 • Board Director; 2007 – 2014 • President; 2012 – 2014 • Director General; 2015 to present

3. A bit about The BAR • Over 100 years of representation • 418 Members – 563 locations • BAR Members directly employ 10,893 staff • Manual = 6,917 (63.5%) • Sales/Administrational = 2,665 (24.5%) • Managerial = 1,311 (12.0%) • BAR Members ‘operate’ 4,462 vehicles • Under 3.5t = 1,627 (36.5%) • Over 3.5t = 2,835 (63.5%) • BAR Members completed 533,584 moves in 2016 • Domestic moves = 275,942 (51.7%) • Commercial (Office) moves = 128,586 (24.1%) • Overseas moves = 129,056 (24.2%)

4. A bit more about The BAR • Transaction numbers ytd (year on year 01/01 to 31/10) 2016 v 2017 • Domestic Moves • 2016 – 252,375 moves reported • 2017 - 258,510 moves reported • +2.43% • Commercial Moves • 2016 – 121,808 commercial moves reported • 2017 - 118,459 commercial moves reported • -2.75% • Overseas Moves • 2016 – 126,314 moves reported • 2017 – 103,052 moves reported • -18.42%

5. And a bit more • Total transaction volumes 2017 ytd are -4.09% when compared to 2016 • 2017 v 2016;+I new Member (+0.24%), +4 locations (+0.72%) • Membership numbers have remained static so the inference is that Members have collectively done marginally fewer moves • The UK moving industry has circa 4000 registered companies of which circa 50% are ‘man and van’ operations • So, relative to professional moving companies,BAR Members have a 21% market share by number of companies or a 28% market share by number of locations • Estimated value of BAR Members market share = £1b • Contribution to The UK Plc by BAR Members in terms of direct taxation is circa £235m

6. The Brand

7. Brexit thinktank Confederation of British Industry (CBI)

8. Intelligent debate?

9. The challenges? • Uncertainty in the economy generally causing disruption to sector market • Weak £ • Interest rate increase • Housing stocks • Wage increases not keeping pace with CPI/RPI • Less disposable income • Infrastructure needs • Customs • Border controls • Legislation • Labour/skills shortage

10. What next?

11. The UK property market • Recent interest rate rise to 0.5% from a 10 year low of 0.25% with potential for future rises affecting consumer confidence • Annual house price growth has fallen to 2.1% • Sellers offering ‘seasonal’ deals to encourage buyers • Drop in selling prices is normal at this time of year but is lowest fall since 2007 • Level of stamp duty adversely affecting sales – possible review in Chancellors upcoming budget • A shortage of properties, particularly affordable housing, on the market • Lords cross party committee recommended 300,000 p.a. • Govt target of 200,000 p.a. not being met

12. UK house price growth

13. Affordability?

14. The domestic moving marketplace • Average price of property coming to market up 0.4% to £226,367 in September compared to previous month • Some regional variations but overall a reasonable picture • ONS have continued to report a period of modestly increasing demand and a growth in house prices throughout 2017 • The NAEA report that demand for housing grew by 16% in 2016 but with the supply of available housing falling away • Average number of house hunters registered per member branch increased • General feeling amongst BAR Members has been one of cautious optimism as through 2017 • Threats are the availability of affordable housing and the large number of ‘unregulated’ businesses that operate in our sector

15. The overseas moving marketplace • Activity levels significantly less than in 2016 • Only real growth area was West coast of Africa, all other locations saw reductions in traffic • T.o.R. changes have impacted on processing time for imports into the UK • Also no longer possible for the UK to be used as the main European hub and entry point for importation of household goods into Europe • Guestimate is that this change has re-routed between 15,000 and 20,000 containers per annum that have historically been routed through the UK destined for other (non-UK) EC countries – costing our Members many £m’s of pounds in lost revenue • A period of some change for overseas movers and no immediate signs of improvement

16. The commercial moving marketplace • Q1 2017 saw record £5bn transacted in the London office market • Short term effect on confidence caused by the election but unlikely to last • Occupiers face considerable uncertainty including their continuing ability to trade with the EU • No concrete announcements from corporates about their post Brexit strategies • Strategies can take months or even years to evolve and implement, but also lack of hard information yet on the implications of Brexit • In London, lower levels of refurbishment and fit out programmes in Q1 2017 • Shortage of high quality office space across regional office markets • New ways of working (home workers/flexible hours/the ‘gig’ economy etc)

17. The commercial moving marketplace • BAR/CMG Members have adopted a ‘knowledge is power’ strategy • Commercial and strategic partnerships created to secure sector awareness (BIFM/P&FM) • Best practice seminars and thought leadership sessions • Embrace the changes in trends and diversify and enhance their service offering to reflect those changing needs

18. Infrastructure needs • The RHA, supported by The BAR, is lobbying for a ‘Land Transport Agreement’ • Currently access to the market and the occupation for all international commercial road haulage by HGV’s is authorised by the EU wide “community licence” system. • This system facilitates international road haulage throughout the EU. • The international road haulage market in the EU is fully liberalised. • The European system allows cabotage, and maintaining some cabotage arrangements might be desirable but not vital

19. Infrastructure needs • Proposal 1. • For the purpose of international road haulage the EU rules governing vehicles and drivers such as drivers hours, tachographs, vehicle standards and roadworthiness standards to be maintained • This will commit the UK sector to accept EU and other internationally agreed rules for UK vehicles entering the EU. These rules may change over time. Compliance would apply equally to UK and EU road haulage operators. • Proposal 2. • It is proposed that the UK and EU enters into a Land Transport Agreement for international road haulage that maintains the basic structure of the current community licence system. • A similar model already exists between the EU and Switzerland and the simplest way would be that the UK continues to issue UK Community Licences as now.

20. Infrastructure needs • Proposal 3. • It is proposed that the land transport agreement makes provision for movements by operators who are undertaking special transports such as the movements of circuses, concert tours, film crews and similar where the goods transported are used temporarily in EU member states or the UK and the goods are re-exported after use. Such movements should be defined as international movements under the Land Transport Agreement so they are not mixed up with cabotage rules. • Maintain the status quo – or as near to it as can be agreed!!

21. Labour/skills shortage

22. Labour/skills shortage • An independent analysis of professional drivers in the UK logistics sector states that; • No. drivers employed in UK logistics is 316,000 • The number of LGV drivers in employment has increased by 5% compared to last year • 10% are EU Nationals • The driver shortage is currently estimated at 35,000 LGV drivers • Around 64% of LGV drivers are 45 years or older • Average age is currently 47.9 years • Protecting the status of those employed in the UK is vital

23. Opportunity or threat?

24. Remember Y2K!

25. In conclusion

26. Your questions?