Chamber Blog

In the last budget the Chancellor emphasised the Government’s wish to encourage investment from British pension funds in British infrastructure and explained that the Government was working with a dozen of the largest schemes specifically on that.  This work is of immense importance.  There is a wealth of money looking for a better return than currently available in the market or only available in higher yielding equities with attendant risk.  In view of the exceptionally low yields currently available there is a one off opportunity now to match the need to book investment in the UK’s key infrastructure.

Within Lord Heseltine’s’ report ‘No stone unturned’ he estimates that the UK requires over £250 billion of infrastructure investment over the next five years, the vast majority of which will need to be provided by the private sector.

Pension funds are potentially a major source of capital for this investment. The scale of assets held by the UK’s pension funds and other investment schemes is enormous. Combines, public and private sector pension schemes are said to have approximately £2 trillion in assets.

There is news today that Local Government pension schemes may be allowed to invest up to £22.5bn extra in homes, roads and other forms of infrastructure. Communities Secretary Eric Pickles said there was a “huge investment opportunity” to boost the economy and ease the housing shortage.

Currently a maximum of 15% of the £150bn in local government pension funds can go to infrastructure. The government’s consultation will look at increasing this to 30%.This would take the largest possible investment from £22.5bn to £45bn.

The existing rule is supposed to ensure that the funds have a diverse range of assets, so protecting the ultimate value of the pensions.

A key question to be answered is whether investing in infrastructure would actually give the funds the steady, secure returns they need.

A report published last month by the Future Homes Commission, set up by the Royal Institute of British Architects, said a possible 100,000 to 300,000 homes could be built in the UK every year using council pension funds.

Another report, released last year by the Institute for Public Policy Research, predicted a shortfall of 750,000 homes in England by 2025.

There is no doubt that to improve economic growth Norfolk needs major infrastructure investment including new housing so we will be watching this debate with close interest dnd feeding back opinions from our members.

Onshore wind farms have been in the press recently with mixed messages coming out from government. However the Norfolk Chamber is clear that offshore wind farms and the current and potential investment from Norfolk Chamber member East Anglia Offshore Wind (EAOW) and its contractors is good news for the Norfolk business community. EAOW is a joint venture between Scottish  Power Renewables (SPR) and Vattenfall.

To date EAOW have invest £7m in East Anglia and they have made it clear during conversations we have been having with them that they are trying to use local contractors where possible to ensure the region benefits as much as possible from jobs and investment as a result of the scheme. With support from Brandon Lewis MP I have written to John Hayes to ask for a meeting with him in Westminster, and have already organised a lunch with him and industry leaders in May 2013 after his keynote speech at our Sustainability 2013 conference on 9 May 2013 at John Innes, Norwich.

Ann  Stewart economic cabinet members Norfolk County Council and I  met up with Andy Paine EAOW programme director in Barrrow in Furness in September prior to visiting Vattenfall’s latest offshore wind farm Ormonde. Andy is clear that with the help and support of local contractors East Anglia Offshore Wind is making strong progress and is on schedule to lodge their first application for consent this year. Further opportunities will become available as the wind farm progresses through its consenting, construction and operations phases.

EAOW has already placed a number of contracts with companies in the region and that over the last two years, as part of plans to build one of the largest offshore wind farms in the world; it estimates it has helped support almost 170 jobs across East Anglia through its investments.

These include Chamber member Gardline marine services, marine researcher Centre for Environment, Fisheries & Aquaculture Science (Cefas), fisheries consultants Brown and May, online consultation experts Consense, consultants Eastern Edge and land agents Freedom Group who are all working on East Anglia ONE, the first phase of the East Anglia Zone

There is still work for Norfolk members to do however to ensure that investment comes to this area and not further up the east coast. As mentioned earlier Ann Stewart Economic Cabinet member for Norfolk County Council and I spent time with Andy Paine and his team including Vattenfall’s President and CEO Oystein Loseth celebrating the official opening of  Vattenfall’s newest 30 turbine Offshore Wind Farm Osmonde just off Bury in Furness in September 2012. My pictures tell their own tale!

Until I physically visited the Osborne Wind farm  I had found it is quite difficult to understand the size of these turbines but seeing is believing. Each jacket foundations is  45 metres high and weights approximately 500 tonnes or putting it another way each individual jacket will weigh as much as 70 African elephants and if all thirty jackets were stacked end-to-end they would be 13 times higher than the Forth Rail Bridge! The Osmonde turbines cover an area of 8.7km2 and will meet the needs of more than 100,000 UK households so the development being planned by EAOW to power over five million homes is truly amazing

The four hour boat trip out to the Ormonde Windfarm with high winds, rain and significant swell convinced me that I am not looking for at a career change… but it did convince me that the potential for this region is vast.  Norfolk and Suffolk Chambers are having regular meetings with EAOW and will feedback supply chain opportunities to our members as and when they become clear.  In addition we will continue to lobby government so that they fully understand the importance of offshore wind farms to the UK economy and start to give some certainty to the industry.

The latest British Chamber of Commerce survey results which include Norfolk Chamber members, indicate that exports are growing but at a slower pace. The government must do more to help businesses realise their exporting potential.

In conjunction with DHL, BCC publishes a report every three months based on the responses of over 1,500 exporters to a survey on their trading conditions. The results of the survey show that exporters are facing a challenging time. Although the key indicators are all still in positive territory, which shows a welcome expansion, the results nevertheless point to weakening activity for exporting firms, with sales and orders balances down on the quarter. This downward movement for exports, domestic performance and weakening employment expectations indicate that exporters are operating in a difficult environment of continuing global uncertainties.

The significant increase in cash flow concerns for services is particularly disappointing; earlier this year other BCC research showed that the sensitivity of export performance to cash flow and access to working capital and unfortunately the situation hasn’t seem to have improved. Despite these challenges, exporters do remain confident about increasing turnover and profitability over the next 12 months. Confidence remains firmly in positive territory for manufacturing and services exporters, with balances improving on the quarter. Other bright spots include falling cost pressures, improved domestic balances for manufacturing exporters and receding concerns about exchange rates. The fall in concerns about exchange rates is a slight mystery considering the recent strength of the pound. But this could be explained by a number of factors such as a delayed reaction by firms as they hedge against upward movements.

There is great potential for Norfolk businesses in the exporting market but they do need further assistance from the government. In the report we call on the government to ensure there is swift and easy access to the new funding package announced to expand the Tradeshow Access Programme and to empower the Business Bank to originate loans and lend directly to businesses. 

If you are an exporter or looking at the potential of international trade do review the export zone on our website

It’s been a busy week in Westminster, with an avalanche of economic data, announcements and new legislation emanating from government. We learned, for example, that the new Growth and Infrastructure Bill will include previously-trailed measures to simplify the planning system and to cut the volume of paperwork that businesses have to submit for some applications.

But in a less-visible move, the Bill also includes clauses to delay the 2015 revaluation of premises for business rates until 2017. Ministers argue that this will deliver greater certainty and stability for businesses, who often suffer wild swings in their rates bills at the time of a revaluation. They also believe that announcing the delay will mean that future revaluations don’t take place close to elections – thereby reducing the chance of short-term political decision-making.

I’m keen to understand what the impact this delayed revaluation will have on businesses across the Norfolk. Do you think that it will, as ministers claim, increase stability and certainty at a key time? Or do you think there may be unintended consequences for firms, whether in city centres, on industrial estates and business parks, or in rural areas?  Your feedback is very welcome.

Meantime, we will begin to campaign – once again – for action to stop further hikes in business rates. Rises, which take place in April, are pegged to the previous September’s RPI inflation figure, which was also announced this week. The 2.6% rise businesses face in April 2013 comes after a 5.6% rise in 2012 and a 4.6% rise in 2011. It’s time to say enough is enough. So as our response to the inflation statistics made clear, we will be making the case  

There is no doubt that it is tough doing business during these challenging economic times. However for an increasing number of people it is the right time to make a life change and start their own business. Statistically it is proven that new business who seek and take independent advice are more likely to be successful including joining your local Chamber or entering into competitions like the Local Business Accelerator (LBA).

Norfolk Chamber has put together a package aimed at start up businesses. https://www.norfolkchamber.co.uk/join-the-chamber. In addition to free legal and HR helplines and legal insurance worth over £670,000 and free banking, a start up can use the face to face networking events and as important these days the use of the Chamber’s online ‘PR machine’ through our community website and social media activity. Since April over 30 start up businesses have joined the Chamber with six signed up so far this month and more in the pipeline.

Publicity is key to any start up business and there currently is a great opportunity for Norfolk new businesses up to 5 years old to enter the Local Business Accelerators (LBA) competition supported by Archant as one of 500 local papers who have joined forces with Dragon’s Den’s Deborah Meaden. The winner has the chance to win a free ad campaign in their local paper plus mentoring support from local business leaders and free Norfolk Chamber of Commerce membership for a year. If the winner is already a Chamber member we will give them their next year’s membership f.o.c.

The most promising businesses will go forward to the national stage of the competition to win a year’s mentoring from Deborah Meaden and a local advertising campaign devised by a top London creative ad agency. Last year’s national winner was Ilkly Brewery in Yorkshire who have seen their order double as a result of mentoring support from Deborah Meaden and free LBA ad campaign in its local paper.Last year’s regional winner was Norwich-based Indigo Swan who received mentoring support as well as attending the prestigious final event in London.

Business can enter online by logging on to www.accelerateme.co.uk and filling in the application form. The closing date for entries is Friday, November 16. More details https://tinyurl.com/9fsorfv If you are a business under 5 years old you have nothing to lose and a great deal to gain by entering the competition.

Whatever size business you are please check out our events programme. Our B2B Business Exhibition next week 18 October has a range of key speakers and workshops as well as over 60 exhibitor stands and is free to attend https://tinyurl.com/cp5tgth. If you are based in Great Yarmouth our ‘Pitchng for Business’ event delivered with enterpriseGY on 14 November and also free to attend gives you the opportunity to attend a choice of six workshops and network over lunch with some of Norfolk’s top buyers. https://tinyurl.com/8hf4rsz

Travellers from the UK are often impressed by the modern trains and stations that European railways seem to have, and the way they’re integrated with other modes of transport.  Although some of this may be that the grass seems greener on the other side, but there’s one key advantage continental Europe has and that is the price of their fares. Excluding restrictive advance tickets, recent analyses found that season ticket prices in the UK per kilometres are 75 per cent more costly, ordinary return 52 percent more and long-distance ticket are 26 per cent more expensive. In 2013 and 2014 plans are being made to raise fares in the UK by three percent above inflation. 

The reasons for higher fares are firstly that the UK railways cost a lot to run, partly because of the legacy of what is, at heart, a Victorian network. Current running costs are also due to decades of underfunding. Network Rail, which runs the track and signalling, is getting costs down and we’re on track to cut the state’s share of spending on rail to 25 per cent by 2014. Around 85 percent of state spending on rail goes on infrastructure so we are not subsiding empty trains we’re paying to make sure we maintain the connectivity of the network. We also need to recognise that investing in rail serves the nation and is not a wasteful subsidy.   Improving our railways and ensuring that fares are affordable helps to cut green house gas emissions, tackle traffic and support the economies of our cities by enabling people to get to work. Many disaffected commuters face hikes of around three times the expected rise in wages.

It is essential that we persuade Government that investing in the railways makes good business sense and in particular investing in East Anglia rail links will unlock significant economic potential. The Norfolk Chamber of Commerce has joined with the Norfolk MPs, New Anglia LEP and Norfolk County Council and our partners across Suffolk to call for improvements to the rail services serving Norfolk.

During this summer, the Government approved funding for the improvements to the Ely North Junction, which would allow half-hourly trains from King’s Lynn to London.   However that announcement was only the first step in the series of improvements measures for the East Anglia network which are needed.

With Network Rail developing its detailed spending programme from 2014 to 2019 over the next few months, we need to reiterate to new transport secretary Patrick McLoughlin the investment priorities needed to be carried which are set out in the East Anglia Rail Prospectus These include the case for faster journey times between Norwich and London and half hourly services from Norwich to Cambridge. It also lobbies for improving freight capacity an upgrading rolling stock.

We got an early success in the rail statement in July but we need to continue the campaign with a focus on the Norwich – London line as it is imperative that East Anglia and Norfolk in particular get the quality rail service it deserves.  

To get the full picture of what companies think about the current climate for accessing external finance, the Chamber network undertook a survey of Chamber members in mid September. The results show that although banks and building societies are the main source of finance for firms, half of businesses lack trust in these financial institutions.

At the Chamber, we continue to hear from businesses about their concerns over accessing the finance they need to grow. Over the last year, these concerns have coalesced around the core issues of trust in, and relationships with financial institutions and the transparency of the products offered to businesses.  So to get the full picture of what companies think, we undertook a survey of Chamber members in mid September. The results, comprising responses from 1,560 businesses across the UK, show that although banks and building societies are the main source of finance for firms, half of businesses lack trust in these financial institutions. Over a third of respondents said that they trust financial institutions less than they did a year ago, and almost four in ten are not confident in securing finance. Although these are UK statistics they very much reflect the opinion of our Norfolk members

Only 57 per cent of respondents felt confident that they could secure external finance, and over a third (37 per cent) were not. When asked about government-backed finance schemes, 43 per cent of businesses had not heard of any of them, with younger businesses and micro firms more likely to be unaware of them. However 59 per cent of firms said a government-backed business bank would make them more confident about accessing finance.

The Chamber welcomed the commitment from government in late September 2012 to create a British business bank. It is the Chamber’s firm belief that only a state-backed business bank can play both a pro-cyclical and counter-cyclical role to encourage access to finance. But beyond the model outlined by government, this new institution will need the infrastructure to make its own decisions on loans, and its own channels to deliver funds to growing businesses.

Monday saw the implementation of the second Common Commencement Date for new regulations affecting businesses for 2012. Changes that came into force will likely receive a lukewarm reception from business. By far the most notable change coming in will be pensions auto-enrolment, with a £2.8bn cost to business. However, this threatens to overshadow the recent progress made by the government in alleviating the burden of red tape.

Last week saw the implementation of the second Common Commencement Date for new regulations affecting businesses for 2012.  Changes that came into force will likely receive a lukewarm reception from business, with companies seeing some welcome changes – changes to CRB checks and audit requirements – and some less than popular measures – such as cost recovery by the Health and Safety Executive (HSE). By far the most notable change will be pensions auto-enrolment, with a £2.8bn cost to business. The changes to pensions are part of a broader discussion around the challenges of a changing demographic in the UK, as opposed to forming part of the analysis into the government’s deregulation policies.

The government recognises the burden that unnecessary, or badly designed, red tape places on companies and the effect that this can have on growth, innovation and job creation. The government has made some tangible progress in this agenda in recent months, with some welcome reductions to the bureaucracy faced by firms. Notably, the recent announcements on changes to the health and safety regime for companies – particularly the changes surrounding ‘strict liability’ and the reductions in inspections – announced last month were welcomed by businesses.

However, this relief was short lived. New health and safety regulations came into force on 1 October placing a duty on the HSE to recover its costs for carrying out its regulatory functions from those found to be in material breach of health and safety legislation. At present, the cost for this is £124 an hour. The Chamber accepts that a cost recovery principle will provide a deterrent to those who otherwise fail to meet their obligations, and provide a level playing field for those who do. However, it is as if the government is taking one step forward and immediately taking one step back. This change risks damaging relationships between good, law-abiding companies and the HSE.

We are concerned that the new regime could effectively incentivise health and safety inspectors to find businesses in material breach of regulations. Under this new regulation, the focus of health and safety inspectors could shift from helping honest companies, to making money for the HSE – especially given the apparent 35% overall spending cut which the HSE needs to make. Given the current economic climate, even hypothetical excess costs are enough to give real cause for concern in the business community. This ultimately filters through to business confidence, which is already fragile enough.

For businesses on the ground, this change will likely feel like a step backwards in Whitehall’s attempts to reduce the burden of red tape. Given the government’s recent progress, and the new Business Minister’s attitude towards red tape, this will only fuel businesses frustration with the government. The government must continue in its efforts to lessen unnecessary regulations affecting companies, particularly those without a dedicated HR or legal department to deal with red tape. Moreover, we must also ensure that future legislation that affects companies is proportionate and does not distract companies from growing and creating jobs.   

Last Monday started off just like any other normal back-to-Parliament week for a backbencher. Then the phone rang. Even with reshuffle chatter bubbling away in the background, any MP might hope, but certainly not expect it to be the Prime Minister. With that I was a Local Government Minister at the Department for Communities. Surprised, yes. A privilege, certainly. A new challenge, definitely. But I am ready and eager to roll my sleeves up and get on with the job of governing.  So instead of deciding which debates to attend and thinking about select committee work I was off to join Eric Pickles at our Victoria HQ. So far, so good.

I have always been an avid Olympics and Paralympics fan and I am keen to see the sporting spirit that swept the nation this summer continue. So I was thrilled that one my first duties as a new minister was to attend the Olympic cabinet committee, chaired by the Prime Minister (I seem to be seeing a lot of him lately!). We discussed the huge contribution made by team GB, not just the athletes, but  also the organisers and games makers that made sure 2012 went off without a hitch. We talked about the plans for the closing ceremony and parade which, I think we can all agree was truly great way to cap off a stellar sporting summer.  Not to mention Andy Murray’s first grand slam victory.

Day two meant the Government’s big announcement to boost the economy, deliver 70,000 new homes and create 140,000 jobs through billions in debt guarantees, new housing investment and more planning deregulation. The plans were announced by Prime Minister and the Deputy Prime Minister, but Eric and our team of ministers all took to the front benches to set out the steps to Parliament that build on the housing, local government finance and planning reforms already in play. Getting growth going is a top priority for the Coalition and this package is something the chamber will no doubt welcome as a key contribution to that.  

With any new job the first week is often about learning the ropes. So I’ve been settling into my new offices, learning my way around the building, meeting with my new ministerial colleagues to discuss our priorities and responsibilities. I also have a new private office team and daily tasks like correspondence, responding to parliamentary questions, reading my briefing notes or meetings with the civil servants to get up to speed on various aspects of my portfolio, which covers local government, the Fire Service, the Thames Gateway and community pubs.

Talk about hitting the ground running, which is ironic given that my new role has given me less time to train up for the triathlon I’m competing in. The weekend will hopefully mean I can catch my breath, get in some training and spend time with the family. Although I’ll have my ministerial box to get through and my first ever departmental questions on Monday to prepare for, so fingers crossed.

Love it or hate it social media is here to stay. Just over a year ago Paul Hill the then business editor of the EDP challenged me to get involved in social media.  I even wrote an article in the EDP about how I needed to get up to speed on how to use social media effectively, but that I was doing so with some reluctance.

My first step was to organise a business event last September, it considered all aspects of social media from a novice point of view which meant that I too could learn what was what. I did learn a great deal and facebook, linkedin, twitter and google+ were put into context.  However, I soon found that knowing what each of them did, didn’t really help me to understand how best to use them within my business.

It was time to call in the experts.  I asked lots of questions both from suppliers and other users to see who was engaged in using social media, to ascertain what was right for the Chamber.  What became very clear was that social media is a very new form of communication and there are very few clear cut right and wrong answers but I learnt a number of key lessons.

The first lesson was that instead of replacing the need for an efficient up-to-date website, the opposite was the case.  Social media channels drive traffic to your website so if it is not up to the job you have a major issue. This is why we invested in a brand new website which provides a proper platform for our social media communications.

The second lesson was that social media does not replace any other marketing which you may already be doing but is in addition to the marketing  mix of emails, website, magazine, literature and newsletters as well as face to face networking. All businesses, but in particular smaller businesses have limited resources, which have to stretch even further to accommodate this new communication method.

However, the most important lesson of all is that content is key and without strong relevant content – don’t bother!  As I start to get up to speed and even have my own twitter account as well as the Chamber having one, I am appalled by how many businesses, who should know better, are using social media without taking the time and effort to really think about what they send and to whom. The right online communication sent to a targeted audience is ‘information’ and can produce business. Poor untargeted content is clearly seen as ‘spam’ and likely to damage your credibility.

Love it or hate it, social media is here to stay and it is important for all businesses to take the time and effort to understand what it means to their own businesses. So needing to understand content management relating to social media better I am organising another September event, details below,  to hear from the experts- I wonder what next year’s event will be about!

14 September 2012 – ‘Engaging Customers –  using social media and technology’ 8am  – 2pm EPIC Studios, Norwich

We knew it was coming as soon as the Prime Minister popped up in the Mail on Sunday, promising that this autumn the cabinet would ‘cut through the dither’ and deliver bold policy reforms to support growth.  Since then, we’ve had a raft of announcements, a far-reaching ministerial re-shuffle, and fairly frenetic telephone calls from Number 10 and departments to the British Chambers of Commerce (BCC) meant to show us that Whitehall means business.

Perhaps the most important event of the week, apart from the promotion of some our Norfolk MPs, was the Chancellor’s off-hand comment on the BBC1 Andrew Marr Show last Sunday, where he let slip that the Treasury was actively considering the creation of a small business bank. An important shift, as it echoes the call that John Longworth Director General at the BCC and his BCC team have been making for many months now. The BCC’s own paper on the case for a British Business Bank is now being discussed at the highest levels of government, and we will work hard over the coming weeks to ensure that any proposal that emerges actually serves new and growing companies in the real economy – rather than just the government’s PR interests.

The most disappointing event this week, on the other hand, was the government’s decision to wallop the key issue of aviation capacity into the long grass. By convening yet another review and pushing decisions into the next Parliament, ministers are shying away from one of business’s top priorities.

So the talk of ‘cutting through the dither’ may yet be just that – talk. Or it could signal a substantive change in government policy that really helps business deliver a new model economy. We’ll be pushing for the latter in the weeks to come.

Ensure you are part of the debate by attending our Economic Breakfast with John Longworth Director General BCC and Chole Smith MP on 5 October at Dunston Hall and attend our business conference Unlocking Success on the 23 November at OPEN Norwich. 

Just over a year ago Paul Hill the then business editor of the EDP challenged me to get involved in social media.  I even wrote an article in the EDP about how I needed to get up to speed on how to use social media effectively, but that I was doing so with some reluctance.

My first step was to organise a business event last September, it considered all aspects of social media from a novice point of view which meant that I too could learn what was what. I did learn a great deal and facebook, linkedin, twitter and google+ were put into context.  However, I soon found that knowing what each of them did, didn’t really help me to understand how best to use them within my business.

It was time to call in the experts.  I asked lots of questions both from suppliers and other users to see who was engaged in using social media, to ascertain what was right for the Chamber.  What became very clear was that social media is a very new form of communication and there are very few clear cut right and wrong answers but I learnt a number of key lessons.

The first lesson was that instead of replacing the need for an efficient up-to-date website, the opposite was the case.  Social media channels drive traffic to your website so if it is not up to the job you have a major issue. This is why we invested in a brand new website which provides a proper platform for our social media communications.

The second lesson was that social media does not replace any other marketing which you may already be doing but is in addition to the marketing  mix of emails, website, magazine, literature and newsletters as well as face to face networking. All businesses, but in particular smaller businesses have limited resources, which have to stretch even further to accommodate this new communication method.

However, the most important lesson of all is that content is key and without strong relevant content – don’t bother!  As I start to get up to speed and even have my own twitter account as well as the Chamber having one, I am appalled by how many businesses, who should know better, are using social media without taking the time and effort to really think about what they send and to whom. The right online communication sent to a targeted audience is ‘information’ and can produce business. Poor untargeted content is clearly seen as ‘spam’ and likely to damage your credibility.

Love it or hate it, social media is here to stay and it is important for all businesses to take the time and effort to understand what it means to their own businesses. So needing to understand content management relating to social media better I am organising another September event to hear from the experts. I wonder what next year’s event will be about!

To access details of our Engaging Customers event on 14 September please go here.