REPORT BACK on Nov 24th 2016, CHATSWORTH, and Dec 6th 2016, AUTUMN STATEMENT
High Peak Business Club’s last two breakfast meetings of 2016 came in quick succession, due to the early timing of the new Chancellor’s Autumn Statement. Apologies for these late reports, it’s been a busy year end!
First on November 24th was Ted Cadogan, CEO of the Chatsworth Trust, aided by Jonathan Fish, newly appointed Marketing Manager. Stylish and elegant – the speaker, his subject, and the location, at Disley Golf Club (our usual venue at Chapel en le Frith being double-booked). We tend not to think of the home of the Dukes of Devonshire for 15 generations as a business, but it is, with an annual turnover of £11 million. Even His Grace and Her Ladyship, it appears, have to pay the Trust a commercial rent for the rooms they live in.
Luckily Chatsworth House, which in 1720 replaced Bess of Hardwick’s Tudor mansion, was built with entertaining in mind; the current estate office was a hotel for visitors (the only original building left is the Hunting Tower, which you can rent – at commercial rates, obviously). So when the 11th Duke died suddenly in 1950, leaving the estate at the mercy of 80% death duties, there was an existential crisis. Property was sold off, a charity created and the new incumbents, Andrew and Debo, got cracking to make the place pay.
Now a Trust (since 1981) the house, garden, park and farmyard, welcome over a million people a year, 80% from the UK, of whom 625,000 pay to get in. That’s 100,000 more than at Hampton Court – in the 21st century this place is a huge success. It’s open all year round, with many return visits. Over 1,600 jobs are supported, including those in the supply chain, with 447 direct employees. It’s a working estate with farms, mining, fishing and holiday cottages as well as a grand stately home, worth an estimated £48 million a year to the local economy.
Not everything is for profit – the recent clay pigeon shoot raised over £¼ million which helps support some 22,000 educational visits. Other charities may use the house: write in before June, as that’s when the list for the following year is decided. You can support the place by Gift-Aiding your ticket money. Every little helps.
Keeping Chatsworth running to a high standard is expensive. Restoring the Mortlake tapestries? £150k each one. Tidying up the house stonework? around £33 million over 10 years (almost done, but the plastic sheeting and scaffolding are still up), with a further £60 million ‘To Do’ list. But the recent fabulous Christmas Nutcracker displays will have boosted numbers as will the Royal Horticultural Society’s 5-day show in June, and the forthcoming “500 Years of Fashion” exhibition. It takes years to set up these events, but they certainly pull in the international trade.
It certainly helps that Jane Austen slept here while plotting Pride and Prejudice, so the house fits the description of Pemberley, and the lonely gruff old bachelor who was then Duke may have been the model for Mr Darcy (Chatsworth is mentioned in the book as one of the houses Elizabeth Bennett visits – how about that for a free ad?). Every Chinese who studies English Literature reads that novel, and then wants to come and see. 60,000 of them flock to the place each year, and they are great customers: “They buy everything,” Ted explained. “In the Year of the Sheep, anything to do with sheep. They go everywhere, and will try every door, locked or unlocked. We love our Chinese visitors. They are an engine of growth for tourism.”
The Farm Shop, described by the Daily Telegraph as “a cross between Harrod’s Food Hall and the traditional country baker/butcher/grocer” was Duchess Debo’s brainchild. She started it as a butchery and it lost money steadily, until in desperation she asked her chef to bake some biscuits, and it’s never looked back. We finished the Chatsworth discussion with a question as to why one can order a Farm Shop hamper online but there is no delivery – you have to drive over to Chatsworth to get it. “The e-commerce numbers didn’t add up,” said Ted. So we’ve put them in contact with our previous speaker from John Lewis Partnership. At the very least, Waitrose locally might be able to stock their stuff. And if they do business together, they owe us a hamper…!
Growth, tourism… music, no doubt, to the ears of new Chancellor Philip Hammond, who presented his Autumn Statement on November 23rd. The biggest innovation? Hammond can see no reason why the UK should have in effect two Budgets a year, so the main Budget will move from the spring to the autumn. As was explained to us by Ian Bingham FCA, our regular guru, from BDO Manchester, “Spreadsheet Phil” is less hyperactive than George Osborne and there were few surprises; indeed some of his predecessor’s flashier ideas have been quietly closed down, like the Employee Shareholder scheme.
With the uncertainty of Brexit, Trump and slowing growth, Hammond also abandoned the target of breaking even on government finances by 2020, giving himself some wriggle room for infrastructure spending (£23bn over 5 years – not going mad, exactly) and supporting business investment. He wasn’t to know that the Stock Market would end the year on a record high, or that employment and inward migration (a sign of economic health, perhaps?) would continue to surge ahead. My guess is that he’s erring on the safe side; nobody gets plaudits for being over-optimistic. That’s why economics is known as the dismal science.
Already announced changes were confirmed: Corporate Tax rates will fall to 19% from this April then to 17% from April 2020 (Trump might trump that) and income tax allowance thresholds will rise. Ian gave us a pie chart showing facts not widely reported: 2015/16 has seen record total tax revenues for the 6th consecutive year, with income tax and NICS contributing 53% and VAT 22%, nearly a quarter of tax revenues. Corporation tax now contributes only 8% into the national coffers. What would Mr Corbyn do to that, one wonders?
Hammond did go hard however on closing tax loopholes. Buy-To-Let is already taking a hammering, in order to release property for the housing market. Footballers’ favourite tax-avoidance schemes and scams will be scarcer now that Financial Advisers face a hefty fine equal to the tax avoided. The BBC has to pay PAYE and NICs for its stars instead of billing their service companies; soon private employers like SKY will have to follow suit. “Anyone who says the government aren’t cracking down on avoidance is wrong,” said Ian. “Good for you accountants, though…” murmured another Ian, long-standing member Ian Pinches. Well, perhaps.
We were delighted to see HPBC regulars Mike and Sally Madden of Legacy IT in Whaley Bridge highlighted in The Times budget coverage on Nov 26th, pleased that the Chancellor is investing more than £1 billion on broadband and mobile technology. The contact came through another HPBC member. We may be modest but our reach is far…
Here’s wishing all our members a prosperous and peaceful 2017. Next meeting is Friday 27th January, from 7.30am, at Chapel en le Frith Golf Club, when we’ll be getting an update on the Northern Powerhouse from Trafford Leader Sean Anstee. We have a full diary up till July – see dates below. More information from our website http://www.highpeakbusinessclub where you can book online, and from firstname.lastname@example.org.
Ted Cadogan, Chief Operating officer of the Chatsworth Trust:
“I’m very glad that you enjoyed the presentation. The meeting was thoroughly worthwhile from our point of view, as it served to broaden the understanding of what we do and how we can collaborate with other businesses in the region, and the bacon butties were fantastic!”