As one of Lincolnshire’s leading independent insurance brokers, the team at Coversure Grantham have great insight into the state of the county’s economy. Insurance is often said to be one of the key indicators of an area’s prosperity. When times are good, demand for business insurance quote tend to rise as companies expand. If the property market is buoyant then we’ll see an increase in the number of new home and landlord insurance policie we’re writing. And if tradesman and other small businesses are busy, then the level of interest in everything from commercial vehicle to liability covers goes up.
If that’s the case then 2019 has been a pretty decent year for Lincolnshire. Coversure Grantham’s been busy and business has been good – despite the notable headwinds that have been abroad. Brexit uncertainty, turbulence in the vehicle market as CV drivers tussle with the diesel/electric vehicle debate, the challenges of climate change, an ‘extraordinary’ growing season and the impending ending of EU subsides to farmers have all made 2019 an unusual year to say the least.
So, what does 2020 hold for Lincolnshire? Local insurance expert and Coversure Grantham founder Janice Smith looks forward and sees a new decade that promises much and which gives real cause for optimism.
What Does Brexit Mean For Lincolnshire?
Like everywhere in the UK, Brexit has brought a lot of uncertainty to our beautiful county. While we were pretty certain in our desire to leave – the county recorded the highest leave vote in the UK with 75% voting out – the three-and-a-half years that have followed have been somewhat less resolute. While the UK as a whole has suffered as a result of this uncertainty, it’s arguable that Lincolnshire has been hit harder than most. With our dependence on agriculture, haulage, food processing and manufacturing, uncertainty as to our future relationship with the EU has been damaging.
Now though we have the prospect of at least some certainty. The Conservative’s election victory and the mighty majority it has given them means we will leave at the end of January. We will work towards a final exit date of the 1st January 2021 and we have our immigration policy sorted. That’s the theory at least!
So, what does this mean for Lincolnshire’s prospects in 2020? Leaving – by which I mean the passing of the troublesome Withdrawal Bill – will mean relatively little in 2020. Yes, we’ll be out; but as we’re in the transition period it will be more or less business as usual. The army of seasonal workers who help gather the harvest in will still be on hand – good thing too given 99% of seasonal workers come from the EU – and free trade will continue.
The real difference will come as we draw closer to the now legally-mandated deadline of December 31st. If there’s no trade agreement in place then the whole no-deal question will rear its ugly head again. Even if you believe that reverting to World Trade Organisation rules is the best thing for Britain – and the general business consensus seems to be that it isn’t – then there will be new rules that need to be adhered to, tariffs to be paid and restrictions on employing non UK nationals to be overcome. These are all perfectly doable, but they will take time to sort and they will reintroduce the uncertainty that so dogged 2019.
Time will tell and given that a year ago the prospect of even getting the Withdrawal Bill through seemed like mission impossible , anything is possible. Irrespective of your political views and standpoint on Brexit, I think I speak for most of Lincolnshire business people when I say that I just hope we can get Brexit resolved once and for all in 2020 and get back to looking to the future rather than bickering about the past.
The Lincolnshire Property Market In 2020
The Lincolnshire property market has fared better than many counties in 2019. Data from the Office for National Statistics (ONS) showed an overall fall of around 1.5% between January and September 2019. This is broadly in line with the picture nationally. What is surprising is that the level of trading for detached and semi-detached properties grew strongly which goes against the overall trend of sluggish supply feeding sluggish demand as people choose to wait out the uncertainty of Brexit. At the lower end of the market – for terraced properties and flats – transactions plunged by as much as 22% and prices for terraced housing rose by 5%.
There’s no doubt that Brexit has been to blame for much of this, but the underlying Lincolnshire market does look strong. Between 2002-2018 the county’s population rose by 120,000, an increase of over 12%. This population increase looks set to continue with The Lincolnshire Research Observatory predicting another 79,600 people will make the county their home by 2041. Add to this the chronic shortage of housing, especially affordable housing, and you have a recipe for price rises in 2020. According to the National Housing Federation, Lincolnshire had a supply shortage of 3,983 homes in 2017. More homes are needed and in 2016/17 housing associations completed or started building around 7,000 in the East Midlands as a whole, over half of which will be for social and affordable rents, but even this rate of construction isn’t keeping pace with demand. If we can see the end to Brexit uncertainty in 2020 then both home owners and landlords could see big gains in 2020.
Lincolnshire Business in 2020
Despite the uncertainty, 2019 has proved to be a pretty good year for business. Here at Coversure Grantham we’ve certainly seen a rise in the number of requests for business, liability and fleet insurance quotes. Yes, there have been some challenges ahead and major manufacturing employers such as Siemens, RWE and Cummins have undoubtedly proceeded with caution recently, but as things become clearer, we can expect (hope) more positive actions in the coming year.
The haulage sector, the apex of Lincolnshire’s trio of key industries, has had a good year but its worries going into 2020 are mounting. Brexit obviously has massive ramifications for those who are used to delivering and retrieving goods from Europe and any customs delays could prove costly. Then there’s the ongoing shortage of drivers. The Traffic Commission estimates that there’s a shortage of around 45,000 drivers in the UK and that figure is rising at a rate of 50 per day. Add in to that the fact that there are 60,000 foreign drivers working for UK haulage firms and any EU national migration could be a real headache. Then there’s the death of diesels and the decision as to whether or not to go electric. Electric vehicles are the future and as we noted in our recent blog, electric vehicles are coming to the commercial vehicle sector. This will be a crunch year for the industry. If we don’t get a trade deal, lose drivers and of there’s a failure on the government’s behalf to support and accelerate the move to an electrically powered haulage industry then we could have a serious problem. On the other hand, if we can address these issues – and that’s far from impossible – then the road ahead could be bright.
Think Lincolnshire business and most people will think farming. It’s a massive part of the county’s economy and provides jobs and supports a host of other industries. So, what does 2020 hold? Leaving means the end of EU subsides and that in itself is seismic. Data from an Informa Agribusiness Intelligence report in 2018 estimated that on average 60% of farm income comes in the form of EU subsidies. Thus far the government has only committed to maintaining subsidy levels until 2022 and those will only be forthcoming if famrers agree to improved environmental management. They have recently announced that extra money will be forthcoming for those who look after the environment, something that EU rules prohibited.
The environment is a serious issue for those who work the land. 2019 has been marked by another year of weather extremes with drought and deluge following hard on its each other’s heels making each stage of the season a trial by fire and water. At the time of writing many local farmers have downed tools as they wait for their saturated land to become accessible so that they can lift crops or see if winter-sown cereals need re-seeding.
On the upside 2020 could open the door to new opportunities. Export markets beyond the EU could be opened up and deals with Japan, Australia and even the US are distinct possibilities. It could also be a massive driver of efficiencies – something most agree is long overdue. A move to electric commercial vehicles could reduce costs and make farming a more flexible business. Automation, something that is already creeping in, could reduce the need for labour and with the growing global demand for meat-free diets, an arable centre like Lincolnshire could see a surge in demand. Again, time will tell…
What Does 2020 Hold For Lincolnshire?
There’s little doubt that this will be a big year for Licolnshire. Given our economy’s singular susceptibility to Brexit fallout, its exposure to climate change, the need to electrify our vehicles, a rising population and our international business outlook the stakes couldn’t be higher. That said, as we have proved time and time again since we reclaimed the land on which many of us stand; the people of Lincolnshire are people who triumph in adversity and no matter what 2020 brings we’ll survive and thrive!
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