Chamber News

The BCC is urging the government to back long-term business investment, by introducing a permanent Annual Investment Allowance of £500,000.

Ahead of the Chancellor’s Budget announcement on March 18, the British Chambers of Commerce (BCC) is urging the government to back long-term business investment, by introducing a permanent Annual Investment Allowance of £500,000*.This would help to achieve better balanced growth and to tackle the unacceptable uncertainty created by the constant chopping and changing of UK tax structures and incentives. This uncertainty is intensified by the current political and economic climate, including the outcome of the general election.

Under current plans the Annual Investment Allowance limit will return from £500,000 to £25,000 after the latest temporary extension ends on 31st December 2015. In addition to a high, long-term Annual Investment Allowance, the BCC’s submission argues that the allowance should be widened** to include improvements to business premises, which would allow companies across the UK to boost productivity, efficiency and hiring.

Commenting, John Longworth, Director General of the British Chambers of Commerce, said:

“The huge declines in business investment at the end of 2014, and our forecast for 2015 – which predicts the slowest rate of growth for investment in six years – are a warning sign that more needs to be done to support long-term business investment.

“Businesses are operating in uncertain times – with conflict in the Middle East and Russia and a sluggish Eurozone to contend with. Yet the greatest source of uncertainty is political and home-grown. Businesses have grown tired of constant chopping and changing in the UK tax system. They need long-term certainty, rather than short-term incentives, to help support investment decisions.

“A long-term investment allowance would give businesses of all sizes much-needed certainty. Our proposals would also allow for premise improvements to be included in the scheme, which are crucial to firms looking to expand their workforce or enhance their efficiency.

“We also need to boost business investment’s contribution to GDP, as this will help us move away from an over-reliance on consumer spending, towards better balanced growth that is sustainable in the long-term. It’s time the government acknowledged that by forgoing some tax receipts in the short term, it will reap the rewards later, as businesses invest, hire and generate bigger profits.

“Apermanent Annual Investment Allowance would be a ‘triple win’ proposition – for business, for jobs, and for government.”

Caroline Williams CEO Norfolk Chamber of Commerce, said:

“The Chancellor has said that the budget is all about securing a truly national recovery from building a Northern powerhouse, connecting up other regions of our country, committing to long-term plans that support science and high-speed transport.

“What Norfolk business needs are commitment to better infrastructure road, rail, broadband and mobile, increased support to businesses wanted to increase their market share through international trade, and additional support to help our young people better understand the world of work. We will only ensure that funding comes to the east and not all to the north if our business community is more visible, and successes of getting Norwich recognised by Tech City is a great step forward.”

From local standout to national champion: BCC Chamber Awards will put best of British business on the map.

This year, the British Chambers of Commerce (BCC) are inviting businesses from across the country to take part and showcase their talents and achievements through a series of regional heats, culminating in the national final, which takes place in London on 26 November 2015. There is also the chance of winning a £10,000 cash prize.

Companies can enter eight categories, covering exports, small business, people development, technology, high-growth firms, community, young people and partnerships with the education sector.

The Awards will be demonstrating the very best of British business, highlighting the positive contribution that businesses make to the UK economy and to society as a whole. The categories are:

• Small Business of the Year
• Export Business of the Year
• High Growth Business of the Year
• People Development Award
• Best use of Technology to Improve Business Performance
• Education and Business Partnership Award
• Business in the Community Award
• Young Person in Business Award

The deadline for entries is Friday 26 June 2015, the regional winners will be announced on 28 September 2015, with the national winners being announced on 26 November 2015 at a gala awards ceremony in London. To enter online click here

At a recent meeting, members of Norwich Chamber Council heard from Karen O’Kane, Programme Director for Better Broadband for Norfolk (BBfN) and Annette Thorpe, the Regional Partnership Director for BT on the roll out of broadband across Norfolk. The aim of BBfN is to implement the necessary infrastructure to allow 90% of Norfolk to be able to access broadband by the end of 2017. With 84% coverage expected by the end of the first part of the contract at the end of 2015.

Step one is for businesses to find out if they already have access to better broadband or when they can expect it to be implemented in their area. They need to check on the BBfN website: www.betterbroadbandnorfolk.co.ukThis can be done by adding the postcode into the broadband checker on the top right hand side of the BBfN home page. This website also provides advice and links as to how to find out what your current upload and download speeds are.

If a business finds that they are not eligible or cannot access better broadband, they can send their contact details to Karen O’Kane, who will check whether that specific location is due to receive better broadband in the future and she may be able to advise the business of further steps they can take. Karen can be contacted on: karen.okane@norfolk.gov.uk

Businesses need to note that Broadband speeds will not automatically improve once the infrastructure has been implemented -businesses need to take further action:

1. Find out whether you can access fibre based broadband – an information sheet is attached
2. Contact your existing broadband provider to see what packages are available
3. If your current provider cannot offer a faster option, then Ofcom have a comparison site which highlights alternative providers, the types of packages offered and the costs involved.https://consumers.ofcom.org.uk/tv-radio/price-comparison

Anglia Log Cabins were the deserved winners of the Norfolk Chamber sponsored Customer Care Award at the King’s Lynn Mayor’s Business Awards. The award was presented at a gala dinner on Friday night at the Corn Exchange in King’s Lynn.

Presenting the Customer Care award was Heather Garrod, President of West Norfolk Chamber Council, she said “Anglia Log Cabins clearly demonstrated that high standards of customer care are the norm and they did not appear to realise that a lot of the service they provided as ‘standard’ would be constituted as exceptional customer care to most people. They consistently went the extra mile – small details such as: additional planting to make the landscaping around the cabin look better; left-over materials turned into benches; and donations of books, Kindles and other IT equipment to school raffles etc are just a few of the extras supplied over and above what they have been contracted for.”

Ahead of the latest ONS trade statistics (Wednesday), the British Chambers of Commerce (BCC) is calling for export and trade growth to be at the heart of the next government’s economic strategy – with a particular focus on working with business to help more companies enter the ‘export game’.

A BCC survey of more than 4,700 businesses including Norfolk Chamber members found that new exporters (0-2 years) accounted for only 11% of exporting firms, while three quarters of exporters (75%) have traded internationally for more than five years. Further findings also show that once firms begin to export they rapidly expand into other markets, as almost two thirds (64%) of exporters trade with six or more countries.

The BCC has proposed a number of measures to assist first-time exporters, and to help existing exporters target new international markets:

• Continue to develop a world-class, global business-to-business network of British Chambers and business groups- linking British firms with customers and opportunities for growth in the fastest-growing overseas markets.
• Continue work to bring UK Export Finance up to par with the world’s best export finance agencies – ensuring UK businesses can access finance needed to seal deals in markets around the world.
• Reform the UK’s passport and visa system – to allow overseas British business people and their foreign counterparts to conduct trade activity with ease, boosting Britain’s export performance.
• Make foreign language learning compulsory from age seven to 16 – supporting more young people to ‘think global’, and acquire the knowledge and skills that are highly valued by Britain’s exporters.

Commenting Caroline Williams Norfolk Chamber of Commerce, said:

“Exporting is like a ‘eureka’ moment for many companies – once they’ve done it for the first time, new business opportunities, ideas and profit follow.

“Business and government can and must work together to help more companies start exporting, and ensure that Norfolk has a steady flow of firms keen to move beyond the domestic market for the first time.

“The key is to make it easier for companies to consider trading internationally, and make it a bigger part of our business culture. That’s why building a strong global British business-to-business network is so important, since it helps a company from Bradford, Bristol or Belfast land on its feet in Bogota, Bangkok or Beijing.

“It will take a concerted campaign to achieve the ambitious export targets set by the Prime Minister. By working together, business and government can eliminate the UK’s stubborn trade deficit – and unlock future economic growth.”

New legislation has come into effect end of last month, which is designed to benefit small businesses, by making it easier for them to bid for public sector contracts.

Central government spent an unprecedented £11.4 billion with small and medium-sized enterprises (SMEs) in 2013 to 2014. The Minister for the Cabinet Office Francis Maude has announced new figures showing that a record 26.1% of government spend went toSMEs.

The new data shows that central government spent 10.3% directly with SMEs, and 15.8% indirectly. View the data oncentral government spend withSMEs2013 to 2014.

A refreshed Contracts Finder website, at www.gov.uk/contracts-finder has been launched. It now has a much better search function, including the facility to search by location. Contracts Finder covers current and future public sector contracts above £10,000 in central government and above £25,000 in the wider public sector. It’s free to use, and you can use it from a computer or a mobile device

Here’s the basic outline:

• At the end of March, new legislation came into force that should open up the public sector’s £187 billion spend each year
• The legislation means the entire public sector supply chain will now be paid within 30 days -vital for small businesses. Everyone in the supply chain must comply with 30 day payment terms, including suppliers and sub-contractors public bodies must publish an annual late payment report, making their accountability more transparent
• A new version of the Contracts Finder website, launched on 23rd February, should make it easier and quicker for companies to find opportunities to bid for. https://www.gov.uk/contracts-finder
• The new rules make it easier for small and medium businesses to bid by splitting up big contracts, removing unnecessary bid criteria and questionnaires for low value contracts. https://www.gov.uk/tendering-for-public-sector-contracts. the bidding process is simpler across the wider public sector – complex forms, such as Pre-Qualification Questionnaires, are now abolished for low value contracts
• A service called “Mystery Shopper” also allows suppliers to anonymously raise concerns about unfair buying practices so they can be investigated and resolved. https://twitter.com/govmysteryshop

East of England feedback from small and medium businesses:

• 43% see late payment from customers as a hindrance to growing their business
• 36% don’t know where to look to find new business opportunities
• 41% find searching for new business opportunities too time consuming
• 31% are wary of working for new clients that might have bad credit
• 35% find putting together bids for new business too time consuming
• 32% don’t know where to get advice or training to win new contracts
• 15% are planning to bid for public sector contracts in the next 12 months

Headlines:

• UK GDP unrevised in Q4 with net trade and consumer spending helping to support growth
• Business investment declined at this fastest rate for six years
• A period of deflation is possible in the coming months, but unlikely to last

Overall, last month’s data releases confirm that the UK’s economy remains strong. However, the recovery still faces several obstacles, intensified by political and economic uncertainty. More must be done to support long-term business investment in particular if the UK is to remain among the fastest-growing countries in the G7

Economic growth in Q4 unrevised at 0.5%

The second official estimate for Q4 2014 economic growth (GDP) was unrevised at 0.5% and therefore remains the slowest rate of growth since Q4 2013. This easing in growth mirrors the results from the BCC Quarterly Economic Survey (QES) over the same period where most of the key national balances are now below the all-time high levels recorded over the last year. In annual terms, UK GDP growth was unrevised at 2.7% in Q4. The latest GDP figures confirm that, despite a recent easing in growth, the UK’s recovery remains strong.

UK exports helping to power growth

The second estimate of Q4 2014 GDP revealed that exports played a major role in driving growth in the quarter. The UK’s trade balance (exports minus imports) deficit narrowed from £13.1 billion in Q3 2014 to £10.4 billion in Q4 2014. This improvement was driven by a 3.5% rise in exports, the biggest quarterly rise since Q2 2013, which more than offset the 1.3% rise in imports over the same period. Consumer spending continues to help power growth, rising by 0.5% in Q4, the fourteenth consecutive quarter of growth.

Business investment weakens

While net trade and consumer spending rose in the final three months of 2014, business investment weakened. UK business investment fell by 1.4% in Q4 2014, the second successive quarterly fall and is the biggest drop since Q2 2009. This fall can be partly attributed to weaker investment by the oil and gas industry, amid falling oil prices. Nonetheless, the fall in business investment over the second half of 2014 is a timely reminder that more needs to be done to promote business investment and achieve better balanced growth.

UK growth likely to quicken this year

In its latest inflation report, the Bank of England expects that the UK economy will grow at a faster rate this year, compared to 2014. The central bank forecasts UK GDP to grow by 2.9% in which if achieved would be the fastest rate of growth for nine years. The Bank of England has upwardly revised its UK GDP forecast for 2016 to 2.9%, from 2.6% and for 2017 from 2.6% to 2.7%. While its growth forecast is higher than our own, their view that UK economic growth has a good chance to regain stronger momentum in the medium term is broadly in line with our own.

Supported by a strong jobs market

In the three months to December 2014, UK employment rose by 103,000 compared with the previous three months to 30.9 million, the highest number since records began. The number of people who are unemployed fell by 97,000 over the same period to 1.86 million. As a result, the unemployment rate was 5.7%, down from 6.0% in the previous three months. This mirrors the Q4 2014 QES where the backward looking employment balances rose in the quarter. However, the youth unemployment rate, at 16.2%, remains almost three times the national average.

Consumers spending power is rising

Average earnings, including bonuses, rose by 2.1% in annual terms in the three months to December 2014. This is more than four times December’s comparable inflation rate of 0.5% and means that wages have their biggest lead over inflation since April 2008. With two-thirds of UK GDP driven by consumer spending, the rise in real earnings and therefore consumer’s spending power is good news for the UK’s near term economic outlook. However, it is important to remember that wage rises can only be sustainable if they are matched by rises in productivity.

To coincide with the launch of National Careers Week, which focuses this year on ‘Life Skills’, a report from the British Chambers of Commerce (BCC) highlights that more than half of UK employers believe a lack of soft skills hinder young people’s readiness for work. This reflects the beliefs of Norfolk Chamber members

The BCC Workforce Survey,Developing the Talents of the Next Generation,found that 57% of employers cite a lack of soft skills such as communication, resilience and team working, as the main reason why young people are unprepared for the world of work. The survey also found that a lack of focus on employability and enterprise in educational institutions (53%) and a lack of careers advice (46%) impacts on young people’s prospects in the world of work.

The Chamber is proposing a number of measures to get educators and businesses working together to help young people develop the life skills they need to succeed in the world of work. This supports the wider activity that Chambers of Commerce are already doing around the country to bridge the gap between the world of education and the world of work:

• Measuring schools on their pupils’ career destinations– by focusing schools not just on ‘teaching to the test’, but also employability and life skills, we can help ensure young people have a smoother transition into work;

• A guarantee of a business governor at every secondary school– making schools more aware of local business needs and helping to build healthy relationships with their local business community;

• Promoting enterprise modules for all higher and further education students– helping students to build up knowledge of business and prepare for the world of work or entrepreneurship;

• Universal ‘experience of work’ in all schools UK-wide to improve employment prospects– ensuring that all pupils leave school with high-quality exposure to business and the core skills needed for work.

Caroline Williams CEO Norfolk Chamber said:

“For too long, many of Norfolk’s young people haven’t had the preparation or opportunities they need to succeed. We are determined to change the system and ensure that businesses, educators, and government shoulder the burden when it comes to preparing young people for work. We often hear from businesses struggling to plug skills gaps, who express frustration that young people lack the soft skills needed to succeed in the workplace. We need to work better to create a pipeline of talent, ready to become the next generation of team players, entrepreneurs and business owners.

“Employers put exposure to work and life skills like team working, determination, and the ability to communicate effectively, at the top of their wish list when looking to hire. Businesses need to play their part by providing experience of work to young people that goes beyond photocopying or making cups of tea – experience that gives a meaningful insight into working life.

“By measuring schools on pupil career destination, putting business governors in secondary schools and giving university and college students the option to take business and enterprise modules, we can help to give young people the best chance of building a successful career. National Careers Week is an excellent opportunity to highlight the range of careers available to people entering the workforce, and the skills that are at the top of the wish list for employers.”

The BCC will be running a chamber network general election campaign throughout March, with a different theme each week. The first week (2nd- 8thMarch) focuses on developing the talents of the next generation. The site goes live today Monday 2ndMarch via this link:https://www.businessplanforbritain.co.uk/. You can also follow the campaign on Twitter: #chambermanifesto

Norfolk Chamber and Norse Commercial Services recently held a dinner with a group of Norfolk’s business leaders to debate issues being faced by the larger businesses in our county. Topics discussed included: broadband and mobile coverage; how to engage with young people and accessing skilled staff; and the opportunities along the growth corridors along of the A11, A47. These topics are all part of the campaign areas that Norfolk Chamber will be championing throughout 2015 as part of our ‘Business Plan for Norfolk’.

The group was privileged to be able to hold their dinner in The Keep at Norwich Castle and were treated to a guided tour of the work of Norfolk’s finest artists with Dr Georgia Bottinelli and a further opportunity to handle some of the Castle Museum’s artifacts with Dr John Davies.

Peter Hawes, Managing Director, Norse Commercial Services said: “The dinner was an excellent event, lovely venue and food, and interesting company. It was great to hear the views of other local business leaders, and I’m sure the Chamber will be working hard on all of the issues that were raised.”

ScottishPower Renewables has hailed a major breakthrough in efforts to reduce the costs of offshore wind after the East Anglia ONE project successfully secured a Contract for Difference (CfD) in the completive competitive auction process run by the UK Government.

The successful bid was announced today as the shareholders work towards ScottishPower Renewables’ purchase of Vattenfall’s 50% share in East Anglia ONE.

SPR will take the project forward initially as a 714 megawatt (MW) development after winning the auction with a price of £119/MWh, ensuring that East Anglia ONE will be the best value offshore windfarm ever developed in the UK.

ScottishPower Renewables, which led East Anglia ONE’s participation in the auction, has been able to bid at a price that is lower than anything previously seen in large scale offshore wind thanks to the engineering, procurement and operational efficiencies that have been introduced in to the project.

The development will see around 100 wind turbines installed in the southern North Sea. The overall investment will be in the region of £2 billion, and the project could meet the annual electricity demands of around 500,000 homes. East Anglia ONE has planning consent for up to 1,200MW, and ScottishPower Renewables may still seek to build out the full project by securing further capacity in future CfD auctions.

The East Anglia ONE project will now be developed solely by ScottishPower Renewables. Vattenfall and ScottishPower Renewables will continue to develop the rest of the East Anglia zone.

Caroline Williams CEO Norfolk Chamber said: “This is such good news. The Chambers worked closely with Scottish Power and local MPs duringthe CfD budget lobbying period last Autumn to be in a position to get this result. We congratulate Scottish Power on being able to rise to the challenge set and coming out a winner. This is great news for Norfolk and the region.”

Keith Anderson, CEO of ScottishPower Renewables, said: “We are delighted to have secured a contract to take East Anglia ONE forward, which will be one the best value offshore windfarms ever developed anywhere in the world. It signals a major industry breakthrough in efforts to reduce the costs of offshore wind. ScottishPower Renewables has been leading efforts to drive down costs for many years, and we delivered considerable efficiencies in the recent construction of West of Duddon Sands. With East Anglia ONE, we are driving the industry towards its cost reduction targets and demonstrating the long term sustainability of offshore wind.

“Final negotiations will now commence with the wider supply chain, and in the coming months we will look to secure local port facilities to support the project, as well as agreeing contracts for the major components. Overall investment to deliver the project will be in the region of £2bn, representing an opportunity to create significant UK economic benefit and creating employment opportunities for up to 3,000 people.

“We would also like to thank Vattenfall and the efforts of their team in helping to secure planning consent for the project. We will continue to work with Vattenfall on potential future projects in the East Anglia Zone.”

Gunnar Groebler, Head of BU Renewables at Vattenfall, said: “This is welcome news for East Anglia ONE. It has taken five years to reach this point since The Crown Estate awarded the lease to Vattenfall and SPR and almost nine months since being awarded development consent. Now SPR will take on sole responsibility for delivering EA1 after completing the purchase of Vattenfall’s 50% share in EA1.

“Vattenfall is committed to growing its wind business across the European markets it operates in. The divestment of our 50% shareholding in EA1 to SPR means that we can prioritise investment in the UK and the rest of our European wind portfolio. We still see a promising future for the rest of the East Anglia Development Zone – and UK offshore wind generally – and we will continue to work with SPR to deliver the remaining five projects.”

The company is now seeking to start construction in 2017, with the first turbines installed by 2019, and hopes that the project will be fully operational during 2020.

More than 90% of all expenditure on the project to date has been incurred in the UK and, during the planning process alone for East Anglia ONE, more than £15m of contracts have been awarded to local companies working on the project. A separate £17m contract was also awarded to Wood Group of Aberdeen for the construction and installation of weather monitoring masts.

ScottishPower Renewables recently completed the 389 MW West of Duddon Sands Offshore Windfarm, a joint venture with DONG Energy, and is developing the 350MW Wikinger Offshore Windfarm in Germany. Vattenfall is the world’s second largest operator of offshore wind and in the UK operates 540MW from three offshore schemes.

The February edition of the Norwich Economic Barometer has now been published. The Confederation of British Industry (CBI) has upgraded its forecast for the UK’s economic growth this year and expects the UK Economy to expand by 2.7% in 2015, compared with its November forecast of 2.5%.

The ONS reported that the UK industrial output fell by 0.2% in December, mainly hit by maintenance work in the North sea oil and gas fields.

Salaries for professional and managerial workers are rising in the region with the highest rates being paid in Cambridgeshire and for staff in the energy sector, according to a survey by recruitment firm Cooper Lomaz. The average professional/managerial salary in Norfolk is £33,649.

Norwich’s emerging reputation as a centre for technology businesses has been underscored by a new report championing the UK’s digital economy which ranks it 15th in the UK. Group Lotus has announced plans to create 150 new jobs, with the launch of a new car.

To read the full report, click here.

• There was an average 3.1% fall in the JSA claimant count across Norfolk
• The latest Quarterly Economic Survey results highlighted ‘an all time’ high’ in the number of manufacturers and service employers looking to recruit staff
• In the three months to December 2014, UK employment rose by 103,000 and unemployment fell by 97,000 compared with the previous quarter.
• The unemployment rate was 5.7%, compared with 6.0% in the previous three months.
• The youth unemployment rate was 16.2%, unchanged from the previous three months but much lower than the 19.9% recorded a year earlier.

Commenting on the latest labour market figures, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce said:

“The latest figures highlight the flexibility and resilience of the UK labour market. The growth in employment and fall in unemployment are stronger than a month ago and point to improved momentum in the economy after a weaker patch last year. It would not therefore be surprising if the ONS updates its preliminary 0.5% GDP figure for the fourth quarter of last year.

“One area of concern is that youth unemployment remains unchanged after a long period of steady declines. While youth unemployment remains much lower than a year ago, it is consistently higher than the adult employment rate, so we need to look at ways to bring this down further.

“It is positive that earnings are now increasing much faster than prices, however, it is important to remember that wage increases can only be sustainable if they are matched by increases in productivity. We must match the positive developments with the right policies, in order to support business confidence and help drive the economy forward.”