Chamber News

Following the Brexit vote and the economic uncertainties faced by business, it is now more important than ever to take part in the QES to ensure that the Norfolk business community has a clear voice on our local and regional economy. What is the impact of Brexit on your organisation? Have you had to amend your recruitment plans? Are you exporting more or less?

Today (Monday 22 August) is the first day of the fieldwork period for the British Chambers of Commerce Quarterly Economic Survey (QES). It is the largest independent business survey in the UK and is used by the Bank of England and the Chancellor to plan the future of the UK economy. It is also closely watched by the International Monetary Fund.

You can have your say by completing the QES online NOW, which takes less than 3 minutes. The completion deadline for this survey is midnight on Monday 12 September 2016.

Key findings in the previous Q2 2016 survey relating to Norfolk:

Even before the vote, both business confidence and economic growth had softened in Norfolk. The Q2 survey results, which were captured just before the vote, suggested that many businesses had been operating in something of a holding pattern for some time.

• Overall, the figures for both the services and manufacturing firms indicate continued low levels of growth. However, in the run-up to the referendum remained fairly static across many indicators, and slackened in others.
• In the Norfolk manufacturing sector, the balance of firms reporting improved export sales rose to a percentage balance of -11 from -25. The balance of advance orders returned to 0 from -33 in Q1.
• There was a significant rise in Norfolk manufacturers looking to invest in training – up 27 points from -9 in Q1 to 18 in Q2.
• The balance of Norfolk manufacturers reporting improved cash flow fell significantly to -26, from -10 in Q1. The national average was 4 points.
• Ahead of the referendum, services companies in Norfolk reported a drop in both export sales and orders (-9 and -9, down from 9 and 3 respectively)
• Domestic sales and orders for Norfolk’s manufacturers fell considerably, whilst the services sector remained consistent in sales and saw a small growth in orders. For manufacturing, both home sales and orders fell to -15 points, whilst in the services sector sales remained the same at 21 points, and orders increased 8 points to 19.

More results from previous quarterly economic surveys can be seen by clicking here

Click here to complete the Q3 2016 QES now

The successful Employer Training Incentive Pilot which has helped numerous businesses in Norfolk and Suffolk with training costs for staff,has this month increased the amount per learner meaning businesses can claim more funding.

Under this scheme businesses canreceive cashback towards staff training, apprenticeships and qualifications.Businesses can claim 25% cashback on additional training up to £1,500 per learner (previously £1,000).It is only available until 28th February 2017 to businesses that employ less than 250 people (globally) to help Norfolk and Suffolk SMEs to grow.

ETIP Funding can be clamed back on business trainingNorfolk Chamber has recently launched namedThe Training Roomwith half-day workshops on social media, marketing, personal development from experienced trainers.

The scheme

• is available to SMEs across Norfolk and Suffolk
• offers a 25% return against cash paid on additional training made by the employer to a maximum claim value of £1,500 per learner; for Level 3 & 4apprenticeships and qualifications this rate rises up to 40%
• gives the businesses control regarding the choice of provider used to train their staff and the training required
• Eligible training must be additional i.e. non-mandatory and used to enhance productivity, efficiency or vocational effectiveness.

Training can either be

• an apprenticeship (over 19 years of age)
• an accredited Qualification Level 1-4
• non-accredited training

For more information about ETIP and how to apply please click here.

A change to the apprenticeship scheme in England was announced by the Government in the summer budget 2015. The purpose of the levy is to help the government reach its target of an additional 3 million apprenticeship starts in England by 2020. They say that employers who are committed to training will be able to get back more than they put in by training sufficient numbers of apprentices.

As we near the 6 April 2017, when the levy will come into effect, a new document about apprenticeship funding has been released.

The government have provided a tool to calculate an estimate of what you will have to pay, and the amount of funding you will receive in return for training.

The headlines outlined in the document are:

• New funding system comes into effect on 1 May 2017 for any apprenticeships started after that date(to declare liability for the levy on April’s payroll)
• 15 tiered funding bands range from £1,500 to £27,000 based on the type of apprenticeship framework, to manage the tendency of prices to creep up
• Employers will co-invest 10% of training costs, with the government paying the remaining 90%, including those who have not contributed to the levy

How will this impact on Norfolk employers?

• If you have less than 50 staff you will be able to access 100% funding for the cost of Apprenticeship Training from the Government for 16 to 18 year olds and 19 to 24 year olds who have previously been in care or have an Education, Health and Care Plan
• You will pay 10% of the cost of Apprenticeship training if you have more than 50 employees and do not have a pay bill in excess of £3m per year
• Regardless of your size, you will receive an additional £1000 funding for each apprentice you start aged 16 to 18. (£500 at 3 months and £500 at 12 months)
• Regardless of your size, you will receive an additional £1000 funding for each apprentice you start aged 19 to 24 who has previously been in care or who has an Education, Health and Care Plan. (£500 at 3 months and £500 at 12 months)
• If you have a pay-bill over £3m you will pay the levy at 0.5% of your pay bill monthly. The levy paid will be topped up by 10% and you can spend this money within 18 months on Apprenticeship training through the digital system.
• You will be able to apply to become anEmployer-provider and deliver all or some of your training directly to your staff or others.

Commenting on the funding guidance for the Apprenticeship Levy, Caroline Williams, Chief Executive of Norfolk Chamber said:

“Norfolk businesses will welcome the news that the Government will fully-fund 16-18-year-old apprentices, and that the co-investment rate for non-levy payers will be set at 10%.

“It is disappointing however that businesses will have to wait until October, just six months before the proposed implementation date of the Levy, for details of the technical rules. Indeed, the timescale seems very compressed for a complex policy that relies on a major IT set-up.

“The Government’s apprenticeship target is laudable, and businesses see them as a vital way of narrowing the skills gap. But the focus must be on high-quality apprenticeships rather than purely as a numbers game. We look forward to inputting our member views in this complex area going forward.”

In summary, the balance of the key points in the new document are:

• Small employers will not have to pay any training costs for younger apprentices (16-18)
• In December 2016, there will be further employer guidance from HMRC on how to calculate and pay the apprenticeship levy
• Graduates or others with Higher Level Qualifications can be funded to do an Apprenticeship so long as the learning is materially different to their existing qualifications
• Final funding arrangements will be announced in October 2016
• The national AGE grant will continue to be available till the end of the academic year 2016/17. As this is devolved in Norfolk and Suffolk, we assume, but it has not yet been confirmed that this will be the case for the local scheme as well. Click here for details
• A new register will be set up and all training and assessment organisations will be required to register if they want to deliver Apprenticeship training or assessment. (RoAPT). The register will initially open in October and then 4 times a year

If you are a training provider, it is proposed that:

• You will receive an additional payment to that agreed with the employer for delivery of £1000 for each 16 to 18 year old learner and each 19 to 24 year old if they have an Education, Health and Care plan or have been in care.
• You will be responsible for administering payment of the £1000 employer incentives (above) in the initial period of the new system
• You will be able to access additional funding of up to £150 per month to support learners with additional needs
• 20% of the total cost of the Apprenticeship Training will be held back until completion in the employer’s digital account to prevent overpayment in the event that the apprentice does not complete

You can read the full document here.

The Government is looking for feedback on the proposals by 5 September 2016. To have your say please click here.

There are only 9 days left for businesses to have their say on the Norfolk & Suffolk Devolution deal.

Devolution is about giving our region greater control over key areas of our economy such as spending on roads and transport links, housing, skills and social care.

Caroline Williams, Chief Executive of Norfolk Chamber said:

“The Norfolk Chamber Board is strongly in support of the concept of Devolution and what it can do for Norfolk and Suffolk’s economy. Historically, Norfolk has lagged behind the rest of the UK in terms of investment but we are at last starting to be recognised as a growth area and need to build on this.

“Devolution offers Norfolk a prime opportunity to secure a funding to enable the business community to deliver greater economic growth, jobs and a better future for Norfolk as a whole, whilst have the ability to make decisions at a local level. What is on the table is not ideal, but it is what we have to work with right now. It is also only the starting point to help bring additional investment into our county. We need the business community to be heard on this issue loud and clear.”

Norfolk is undertaking consultation into the devolution ‘deal’ before it is finally taken to Government for approval. It is vitally important that the government is aware of the level of support from the business community and we would ask Norfolk businesses to take action in two ways:

1. Submit your own letter of support. Click here for a suggested outline template for your letter. Please forward your letter electronically to:info@newanglia.co.uk

2. Take few minutes to complete the online Devolution consultation – take part now

Our region is on the verge of securing from Government a transformational change in the way our economy operates, which includes the biggest devolution of decision-making for a generation and a significant package of new investment for the Norfolk and Suffolk economy.

This includes:

• £25m a year for 30yrs to invest in new infrastructure and growth projects. (Total of £750m, of which 40% is revenue spending against which we can borrow further significant sums)
• £130m for new homes
• Local control over a £225m transport budget and £20m skills budget

Devolution will help to realise the ambition to boost the economy of the East to over £43billion.

The deadline for this first stage of business support is 23 August 2016 – add your voice to that of the Norfolk Chamber by taking action now.

Norfolk Chamber arelooking for businesses in the engineering sector to support University Technical College Norfolk with a careers day on Tuesday 20 September 2016.

Are you able to volunteer your time by taking an exhibition stand and speaking with students in Year 10-13 about future career opportunities?

The exact timings for the event are yet to be confirmed but will be between 9am-4pm.If you are interested in taking part please emailphilippa.bindley@norfolkchamber.co.ukby 31 August 2016.

This is one of many free careers events Norfolk Chamber will be hosting over the next school year, through Your Future contract with the Careers and Entreprise Company. To find out how you can get involved as a school or businessclick here.

A new digital trade directory is to be produced with the aim of helping UK companies sell their products and services across the world.

To be launched later this year, the Directory of Exporters will, according to International Trade Secretary Liam Fox, revolutionise the way businesses access international markets.

Potential customers and buyers from around the world will be able to search for British companies which are ready to supply the products, services and skills they need.

Dr Fox’s new Department for International Trade will be working with five major high-street banks to get the Directory of Exporters up and running. Business customers of Barclays, HSBC, Lloyds, NatWest and Santander will be encouraged to join the Directory and promote themselves in global markets.

The online tool will be hosted on the Government’s Exporting is GREAT website and will be supported by extensive international marketing aimed at increasing and sustaining the ongoing demand for UK goods and services.

Predicting that exporters will welcome the initiative, the CBI’s Ben Digby said it was encouraging to see the new Department embracing digital innovation as a way of showcasing British export strengths to the world.

For the Institute of Directors (IoD), Allie Renison said that financial intermediaries such as banks are going to be crucial to helping businesses realise export opportunities.

The next step is to make sure these links are forged at the local level, she added, through banks and other professional services firms engaging directly with businesses.

The UK Exporter Directory is currently under development, with the launch scheduled for November this year. Companies interested in being listed are invited to register their interest at www.directory.exportingisgreat.gov.uk

In the first in a series of pieces, the Bank Of England’s regional Agent, Phil Eckersley, comments on the most recent Inflation Report published by the Bank of England.

We are entering what is likely to be a period of significant change for our economy, with the vote to leave the European Union ushering in a new era for the UK’s relationship with the rest of the world.

Some of the adjustments to this new reality may prove difficult and many will take time.

And, while the Bank of England firmly believes that the UK – one of the most flexible economies in the world – can handle this change, there will inevitably be a period of heightened uncertainty as this process takes place.

Last week, the Bank published its latest Inflation Report which explained how the vote to leave the EU has resulted in a material change in the economic outlook.

For example, the big fall in the value of sterling since the referendum will push up import and consumer prices notably over the next three years.

We also now expect growth to be weaker and unemployment higher over the next couple of years than at the time of our last forecast in May.

Importantly, there are signs that this is already materialising: some uncertainty indicators have risen, property markets appear to be weakening, and surveys of activity growth have fallen.

In response, the Bank’s Monetary Policy Committee (MPC) has unveiled a comprehensive package of measures to support the economy.

The package includes a reduction in Bank Rate from 0.5% to 0.25% – the first change in interest rates for seven years – along with a new Term Funding Scheme, worth up to £100bn, to ensure that this cut is passed on by lenders to households and businesses.

The Bank is also expanding its programme of purchases of government bonds by £60bn and launching a new scheme to buy £10bn of UK corporate bonds.

Taken together, these measures should provide a significant stimulus to economic activity, bolstering confidence and blunting the slowdown. And there is scope to extend them if circumstances require.

This package of measures should have a real beneficial impact for businesses and households here in East Anglia. For example, cutting Bank Rate will immediately ease financing conditions as around half of mortgages by value are floating rate contracts and four-fifths of bank loans held by firms are at floating rates.

In the absence of much ‘hard’ data yet on the economic impact of the referendum, the evidence gathered by our regional Agents was particularly important as the MPC tried to assess the state of the economy.

We are really grateful for the time that business leaders have given us over the last few weeks as we’ve sought to better understand how they are being affected by this period of heightened uncertainty.

In the last few weeks, my colleagues Alex, Tim and I have visited companies large and small across all sectors to hold detailed conversations with those people who are making decisions on investment and jobs.

And we have held roundtable discussions and briefings, including co-hosting lunches with members of the MPC, to get a sense of how businesses are feeling.

Although some companies tell us that they have not changed their plans as a result of the referendum outcome, others are more cautious about decisions on investment and hiring.

We recently published our latest Agents’ Summary of Business Conditions which included the findings of our survey on the impact of the EU referendum on our contacts.

The clear result was that the outcome would have a negative effect, overall, on capital spending, hiring and turnover over the coming year.

Our report also highlights a slowdown in growth in business services, partly reflecting a pause in commercial property investment and corporate transactions.

More positively, annual growth in manufacturing exports had turned positive after a period of declining output, helped by the recent depreciation in sterling.

But the weaker pound has already pushed up the price of imported goods for some businesses leading to expectations of price increases in due course.

At challenging times like this, what is always striking is the resilience and versatility of our region’s business community. As circumstances change, companies will adapt to take on new challenges and embrace new opportunities.

We hope that the actions taken by the Bank of England over the past week will play a small part in helping them to do that.

Phil Eckersley is the Bank of England’s Agent for the South East and East Anglia

@BoESouthEast

The Government has awarded a £1.4bn contract to Abellio Greater Anglia to run rail services in our region for the next nine years.

The new service promises to deliver more than 1,040 new state of the art carriages and cut journey times by an average of 10%.

It will also deliver one of the biggest orders for British-built trains – almost £1 billion for 660 carriages from the Bombardier factory in Derby – as part of a contract that will secure 1,000 jobs into the next decade.

Key benefits of the new franchise include:

• At least four 90 minute services (two in each direction) between London and Norwich each weekday and two 60 minute services per day between London and Ipswich

• Free WiFi for all passengers on trains and at stations

• 1,043 new, state of the art carriages between January 2019 and September 2020 to support the faster timetable, with a full programme of refurbishment for the current fleet in the meantime

• Tough new targets for operational performance levels at 93% – up from 89.7% currently

• By 2021, there will be more than 32,000 more seats on services arriving at London Liverpool Street in the morning peak, while the new franchise will introduce 1,144 additional weekday services- an increase of 13% – to stations including Ipswich, Norwich, Stansted Airport, Lowestoft, and London Liverpool Street.

• Most Norwich to Cambridge services will be extended to Stansted Airport.

• There will be later trains between Norwich and Sheringham, Great Yarmouth and Lowestoft.

Transport Secretary Chris Grayling said:

“We are making the biggest investment in the railways since the Victorian era. By awarding this franchise to Abellio East Anglia we will improve journeys for people in East Anglia.

“Abellio’s decision will ensure our train building industry in Derby remains strong.

“This is part of our plan to make an economy that works for everyone – not just the privileged few – by ensuring prosperity is spread throughout the country.”

Dominic Booth Managing Director of Abellio UK said:

“This is great news not only for Abellio but for the whole of East Anglia. We are pleased to become preferred bidder to deliver a transformation in rail services across the region.

“It will enable us to build on the successes of the two short East Anglian franchises we have run since 2012, and we commend the DfT in running a transparent and rigorous procurement process.

“Our plans will greatly improve our customers’ experience with faster and more reliable journeys on new trains with higher frequencies and reduced journey times, to support the socio-economic well-being of East Anglia, one of the country’s most successful and fastest growing areas.”

Jonathan Cage, President of Norfolk Chamber said:

“We are delighted that Abellio, who are a gold patron of Norfolk Chamber, have been awarded the franchise. The new franchise represents a significant investment in our region’s railway and the business community looks forward to seeing a faster, more reliable rail service with new rolling stock as soon as possible.”

Also commenting on the awarding of the new franchise, Caroline Williams, Chief Executive of Norfolk Chamber said:

“Norfolk Chamber has been calling for an improved rail service for many years and we are very pleased with the awarding of the new franchise. The contract will deliver a faster more reliable service; new rolling stock; free wifi; and improved branch line connections for our members. As the franchise has been awarded for a period of nine years, Abellio will have time to deliver a transformation of rail services for commuters and business travellers alike, which will be worth billions of pounds of investment to Norfolk and East Anglia.”

Chloe Smith MP for Norwich North, co-chair of the GEML rail taskforce said:

“Today’s announcement is a great win for East Anglian passengers thanks to our long campaign.

“We have now succeeded in getting huge investment into our rail line in the form of new trains, which are confirmed today.

“These trains are finally what we deserve in the East, giving a more pleasant journey for passengers and most of all giving reliability back to all the people who use the trains for work and jobs. Together with investment in the track and other infrastructure, this is what our campaign has achieved.

“It will deliver ‘Norwich in 90’ along with benefits to all three counties as expected over the next eight years. It means East Anglia is open for business and will bring thousands more jobs to the region, which means a massive boost for the economy and for households.”

Highways England are surveying the road surface along the A47 from New Cut roundabout to Guyhirn roundabout at various locations around King’s Lynn. This will be at Hardwick Interchange, from Monday 8 to Monday 15 August, working on weekdays only.

The surveys will be done overnight, using mobile slow-moving hard shoulder or lane closures. Where the A47 is not a dual carriageway, traffic lights will be used.

This month’s headlines:

• UK GDP growth picks-up in Q2, but the latest QES indicates weaker growth.
• Bank of England cuts UK interest rates to a new record low of 0.25% and expands QE.
• Eurozone GDP growth weakens in Q2, while consumer spending boosts US GDP growth.

The official estimate for Q2 2016 GDP growth highlighted that UK economy grew by 0.6% up from a growth of 0.4% in Q1. Industrial production rose by 2.1%, the fastest rate of growth since Q3 1999. However this is in contrast to the latest QES survey which revealed a weaker picture for the sector.

The Bank of England’s Monetary Policy Committee (MPC) cut the UK interest rate to new record low of 0.25%. This is the first time since March 2009 that interest rates have moved and the MPC also decided to expand the Quantitative Easing (QE) programme. This reflects their view that the UK’s economic outlook has substantially weakened.

Growth in the Eurozone was cut in half in Q2 with a growth rate of 0.3%. In Q1 the growth rate was 0.6%. Whilst in the United States, consumer spending boosted growth. Despite this growth the US economy remain weak and it is unlikely that an immediate rise in US interest rates will be seen.

Bottom Line:

Whilst the decision to cut UK interest rates will do little to support long-term growth, the expansion of the QE programme will play a more substantial role. However increasing economic uncertainty means that it is even more critical to address the long-standing issues facing the UK, including the chronic underinvestment in Britain’s infrastructure such as transport and broadband.

For full details of this month’s economic review click here.

The British Chambers of Commerce along with other organisations attended the Prime Minister’s SME roundtable to discuss the Industrial Strategy, and the vote to leave the European Union.

BCC President Francis Martin attended on behalf of the Chamber Network, and informed the Prime Minister that many businesses remain confident in their future success, but are keen for stability for our markets and economy, clarity on the timetable and approach to our future relationship with the EU, and action on the many issues that require urgent decision to give businesses the confidence to invest and grow.

Francis also emphasised the role that the Chamber Network plays in helping businesses to export all over the world, not just in getting goods to markets overseas but also through our Global Business Network, which connects firms with Chambers and opportunities in dozens of markets around the world

Francis Martin, President of the British Chambers of Commerce, said:

“Our organisation covers businesses of every size, in every part of the country. We have seen first-hand that the ‘business’ view is not monolithic – Many of our members are taking stock and making the best of the decision to leave the EU, seeking the opportunities on offer as well as considering the challenges.

“At the roundtable today we urged the Prime Minister and her new government to focus on the priorities for our member businesses – clarifying the UK’s future trading relationships, the existing EU regulatory framework, and the stability of the pound.”

On Industrial Strategy, Francis Martin added:

“We are supportive of the proposed Industrial Strategy, but it needs to have a broad-based focus that encourages a partnership between business and government, focusing on areas such as the large skills gap in our workforce and infrastructure projects, that benefit every business.

“The government must in particular address the long-standing underinvestment in the UK’s infrastructure. This means action on transport, broadband, and energy generation, which is absolutely vital in driving long-term growth.”

Her Majesty The Queen as patron of British Chamber of Commerce has sent us a special message for our 120th anniversary we are celebrating this year.

The message said: “The Queen was pleased to receive your kind message sent on behalf of the Norfolk Chamber of Commerce on the occasion of your One-Hundred and Twentieth Anniversary, which is being marked at your Annual General Meeting.

“As Patron of the British Chambers of Commerce, Her Majesty much appreciated your thoughtfulness in writing as you did and, in return, sends her warm good wishes to all concerned as you mark this notable anniversary.”

The official date of our anniversary is marked by our AGM on 7th October 2016, on this date in 1896 we were incorporated as Norwich Chamber of Commerce, before later changing to Norfolk Chamber of Commerce.

To commemorate our 120 years we have adedicatedwebpageto share the research undertaken.Take a tour of our President’s Board from 1896; read a brief history of Norfolk’s key industry sectors; find out more about the 120th celebrationevents; and find information on ourChamber Community Fund raising moneyto improve the opportunities and career options open to young people across the county.