Chamber News

Following yesterday’s announcement from Government on a new energy support package for businesses, which will run from 01 April 2023 to 31 March 2024, Nova Fairbank, Chief Executive of Norfolk Chambers of Commerce said: “Despite Government efforts, an 85% drop in the financial envelope of support, will fall short for thousands of Norfolk businesses, who are seriously struggling. “Many businesses have been fighting for their survival for months, and rising energy costs have fast become the tipping point. Whilst we welcome the 12-month duration of this package, its value is nowhere near far enough and means that for some firms, energy will now be a cost too far. “We understand Government must consider public finances, but any support package, short or long term, should be right for business – otherwise we’re going around in circles. The wrong type of support will continue to see business confidence deplete and the Government having to revisit its package. “This is not about giving a handout to failing firms. It is about investing in British businesses, many of whom are confident about the strength of their order-books despite being hammered by eye-watering energy costs. “Our economy will not be able to grow if our businesses are in decline. “Alongside an energy support package, we need an energy support strategy to get businesses on the right track to longer term efficiency. “There are several options to consider, and Norfolk Chambers, together with the British Chambers of Commerce and the wider Chamber network are urging the Government to prioritise the following three:

• Increase OFGEM’s powers: Ensure effective competition in the business energy market for non-domestic contracts by extending OFGEM’s regulatory powers to guarantee businesses access competitive fixed rate contracts, and energy providers move swiftly to pass on wholesale price reductions.
• Energy production: Government to bring forward ambitious plans to enable more renewable and sustainable energy production across the UK.
• National energy saving campaign: Government should launch a national campaign with support initiatives for businesses to drive down current consumption through energy efficiency measures, such as green grants and tax incentives.

“It is a critical year for the UK economy and with the right focussed support, businesses can help turn the economy around and get the UK back to growth and prosperity.” To go with the announced energy support scheme, the Government has published guidance for businesses on their energy support scheme, as well as a fact sheet.    

Europe is our largest trading partner (as of June 2022) according to the ONS. The UK-EU Trade Cooperation Agreement offers now the basis of our new relationship with our European neighbours and covers over £550 Bn of trade. Following the UK’s withdrawal from the EU, it is essential that UK businesses understand the diversity of markets Europe is composed of – and the challenges involved – before making financial or resource commitments. To better inform you of the many opportunities Europe still has to offer, you are invited to join our first Masterclass on Europe, part of our Market’ offer. Taking place on 19 January from 15:00 – 16:00, this session will be delivered by The Export Support Service – International Markets Europe team, covering a variety of subjects including:

• market opportunities and challenges
• how UK companies are supported on their export journey to the European market and what are the requirements that go with it
• the different types of support available through DIT

You can join the webinar by creating an account for the UK Export Academy and selecting this session during sign-up. By joining the Academy you will gain access to a calendar of free events that can support you in starting out or growing your exports. Click here to sign up for free

• After significant declines across all business conditions tracked by the BCC in Q3, most indicators have stabilised at a low level.
• Profitability confidence remains at Covid-crisis levels; only one in three (34%) businesses believe their profits will increase over the coming year, while more (36%) expect a decline.
• Just 33% of firms experienced an increase in sales over the past three months, while 25% of firms reported a decrease, with hospitality firms the least likely to report improvements.
• More firms are reporting taxation (38%) and interest rates (43%) as growing business concerns.

The BCC’s Quarterly Economic Survey (QES) for Q4 2022 shows key economic indicators have stabilised at concerningly low levels, following significant declines in Q3. The survey of over 5,600 firms – 92% of whom are SMEs – reveals business confidence, conditions and sales have stabilised at low levels, while inflation remains the top external factor of concern. The research took place between November 7 and November 30, across the period the Government’s Autumn Statement was announced. Business activity not experiencing any bounce back from significant fall in Q3 The percentage of firms reporting increased domestic sales has stabilised at the low level reported in Q3. Only 33% of firms experienced an increase in sales over the past three months, while 25% of firms reported a decrease in sales and 42% report no change. Activity in the retail and hospitality sectors remains particularly weak. Both sectors are firmly in ‘negative territory’, with more firms reporting a decrease in sales than an increase over the past three months. The hospitality sector is also struggling to operate at full capacity; three quarters (74%) of hospitality businesses reported they are operating below capacity. More firms continued to report decreased cash flow versus increased cash flow. Only 24% of business said their cash flow has increased over the last three months, while 30% have seen it decrease. Business confidence remains at Covid-crisis levels After business confidence plummeted in Q3, firms continued to report a negative outlook for the future in Q4. Less than half (44%) of firms expect their turnover to increase over the next 12 months, while 25% expect a decrease. Those expecting turnover to increase remains ten percentage points down from a level of 54% in Q2 2022.  Profitability confidence remains much weaker than turnover confidence and has stabilised at Covid-crisis levels. Only one in three (34%) businesses believe their profits will increase over the coming year, while 36% now expect a decrease. Little sign of plans to increase business investment Increases to business investment remain low. Only 21% of firms reported an increase to plant/equipment investment over the past three months, while 57% reported no change, and 22% reported a decrease. Inflationary pressures remain top business concern The percentage of firms expecting their prices to rise over the coming months (60%) remains near record highs but is showing slight signs of easing, down from 62% in Q3. Concern about inflation also remains at record highs; 80% of firms cited inflation as a growing worry to their business. But there are also significant jumps in the percentage of firms concerned about taxation (38%) and interest rates (43%). David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: “These results provide further confirmation that business conditions deteriorated significantly in the second half of 2022. “The situation remains critical for the majority of SMEs who find themselves cut adrift by monumental inflationary pressures, often driving triple-digit percentage cost increases, particularly on energy. “Business confidence remains worryingly low, with only a third of firms reporting improvements to sales, and less than a quarter reporting increased investment. The widespread economic damage caused by Covid shutdowns has been compounded by subsequent inflation, global trade crises, and new trade barriers with the EU. For many SMEs, the cost of doing business is now simply too high. “While the change in administrations from Truss to Sunak may have stabilised markets, the Autumn Statement on 17 November appears to have had no impact on business confidence. Indeed, while inflation is still by far and away the top concern for businesses, taxation has now become far more of an issue for SMEs. “These results reaffirm the need to create a stable environment for businesses to invest, with energy, improvements to infrastructure, access to skills, and removal of trade barriers, particularly with the EU, all top priorities for firms.” Responding to the findings, Director General of the British Chambers of Commerce, Shevaun Haviland, said:  “The outlook from businesses remains bleak. Now, more than ever, we need to create the right conditions for firms to invest and grow. “Providing businesses with clarity regarding the new energy support package must be top of the Government’s agenda for the New Year, after they failed to do so before Christmas. “We urge Government to promote business growth by investing in public infrastructure and incentivising international trade, with a particular emphasis on making the UK the global hub for green innovation. “Barriers to trade must be removed in order to allow firms realise their full trading potential. The impasse over the Northern Ireland Protocol continues to loom and the UK Government must work with the European Commission to reach a negotiated solution on its business compliance burdens. “The Government’s New Year’s resolution should be to put business support for SMEs at the heart of its agenda and get the UK back on the road to recovery.” What Businesses Say: “Our electric costs will rise from £34,000 per year to around £250,000 from March and there is so much uncertainty. We want to invest to make us more efficient and reduce our electrical usage, but there are no grants on offer to help.” Small services firm in Somerset “Uncertainty caused by bad government decisions over an extended period have led to wasted effort and lost opportunities in the construction sector.” Micro construction firm in Kent “We are desperately short of semi/unskilled workers. We could increase business by about 20% if we could employ. We are turning away work as we are struggling to meet current requirements with the staff we have.” Small professional services firm in Sussex “We are still suffering from the pretty much total loss of our European export trade. This is directly as a result of Brexit and shipping difficulties, including factors such as double duty payments. This has reduced turnover by 50%.” Micro retailer in Norfolk Link to QES infosheet Q4 2022

Business | Places | People Norfolk County Council is committed to making Norfolk a county where businesses, organisations, and communities continue to thrive together. They have done this by allowing better access to services such as rolling out better broadband across Norfolk and building major infrastructure projects to deliver vital growth to the whole of Norfolk. View their full report here 2022-23 Business Rates Report Business They have been supporting economic growth in Norfolk. See below some of the ways they have helped businesses this past year.

Place Norfolk County Council have also been focussing on places, in particular the £21.4 million operations and maintenance campus is a partnership project, in collaboration with Great Yarmouth Borough Council and the New Anglia Local Enterprise Partnership (LEP). It is estimated around 650 new jobs will be created by the new Operations and Maintenance Campus. Norwich Western Link start of construction is currently programmed for late 2024 with the road open for use in late 2025. Find out more in the video below. People Norfolk has had a full year where Apprenticeship starts have increased – for the first time, following five years of a decline. Norfolk has seen 5118 new apprenticeship starts throughout the year. Norfolk has seen over double the growth seen in national England data (8.63%). Skills bootcamps across Norfolk and Suffolk are currently offering opportunities in a range of sectors/industries. This includes digital marketing, software engineering, web design, construction management skills, CAD for construction and domestic retrofit. Find out more about below.   Cllr Andrew Jamieson, cabinet member for finance at Norfolk County Council discusses what business rates are, and how we use them to grow Norfolk’s economy, as part of the business rate consultation. Simon George, Executive Director Finance and Commercial Services at Norfolk County Council gives a presentation explaining the Business Rates Consultation 2022. You can respond to anything raised in the consultation by emailing haveyoursay@norfolk.gov.uk

• More than three quarters (77%) of firms for whom the Brexit deal is applicable say it is not helping them increase sales or grow their business  

• More than half (56%) of firms face difficulties adapting to the new rules for trading goods    

•  Almost half (45%) face difficulties adapting to the new rules for trading services, and a similar number (44%) report difficulties obtaining visas for staff  

• The BCC has sent the Government a report setting out solutions to many of the issues  

New data released today from a survey of more than 1,168 businesses (92% SMEs) shows significant challenges for UK firms trying to use the Trade and Co-operation Agreement (TCA). The TCA was agreed on Christmas Eve in 2020 to allow tariff-free trade with the EU once Brexit took effect. But a high proportion of businesses say they are still having major problems trying to use the deal to trade with Europe. The BCC has sent the Government a report setting out the main issues the TCA is causing with solutions to many of the problems. The survey also found that alongside problems with the TCA, four in five (80%) firms had seen the cost of importing increase since January, more than half (53%) had seen their sales margins decrease and almost three quarters (70%) of manufacturers had experienced shortages of goods and services. What Businesses Say  “Customs on both sides of the EU border seem to have a separate set of rules to be able to charge different amounts for the same thing. We don’t know until it’s too late what these costs are.” Retailer in Dundee “Leaving the EU made us uncompetitive with our EU customers. We would have lost all of our EU trade without a base in the EU. This has cost our business a huge amount of money which could have been invested in the UK had it not been for Brexit.” Retailer in Ayrshire “Exporting goods into the EU since Brexit, continues to prove difficult. We have experienced a lot of our goods going missing when they reach customs control. Due to additional import costs, we have found that quite a few of our EU customers that we have dealt with for a long time, in regard to providing a qualifying service, now stay within the EU instead of the UK.” Manufacturer in the East Midlands “Brexit has been the biggest ever imposition of bureaucracy on business. Simple importing of parts to fix broken machines or raw materials from the EU have become a major time-consuming nightmare for small businesses, and Brexit related logistics delays are a massive cost when machines are stood waiting for parts. We used to export lesser amounts to the EU, but the bureaucracy makes it no longer worthwhile.” Manufacturer in Dorset Shevaun Haviland, Director General of the British Chambers of Commerce, said: “Businesses want political leaders on both sides to move on from the debates of the past and find ways to trade more freely. “This means an honest dialogue about how we can improve our trading relationship with the EU. With a recession looming we must remove the shackles holding back our exporters so they can play their part in the UK’s economic recovery. “If we don’t do this now then the long-term competitiveness of the UK could be seriously damaged. It is no coincidence that during the first 15 months of the TCA we stopped selling 42% of all the different products that we used to. “Businesses feel they are banging their heads against a brick wall as nothing has been done to help them, almost two years after the TCA was first agreed. The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done. “There are clearly some structural problems built into the TCA which cannot be addressed until it is reviewed in 2026. “But as we set out in our report to Government there are some issues that do not need to wait on months of negotiations or major reviews to be fixed.” The BCC’s TCA Two Years On report sets out 24 recommendations to increase UK-EU trade.  Its top five proposals for quick action are:

1. Create a supplementary deal with the EU which either eliminates or reduces the complexity of exporting food for SMEs.
2. Establish a supplementary deal, like Norway’s, that exempts smaller firms from the requirement to have a fiscal representative for VAT in the EU
3. Allow CE marked goods and components to continue to be used in Great Britain after 2024.
4. Make side deals with the EU and member states to allow UK firms to travel for longer and work in Europe.
5. Reach an agreement on the future of the Protocol on Ireland/Northern Ireland with the European Commission in the early months of 2023, to stabilise our trading relationship.

The Trade and Cooperation Agreement – Two Years On

2022 has been a rollercoaster year of change, challenge, opportunity and resilience for the whole of the Norfolk business community. We have seen political upheaval, with a grand total of three Prime Ministers in one year; rising inflation and energy costs, significantly  impacting on both business and homeowners; huge supply chain and skills opportunities, with the go ahead for Sizewell C Nuclear power station and the awarding of the Local Skills Improvement Plan.  Through it all, the Norfolk business community has stayed strong, resilient and indeed truly amazing! More opportunity is coming to Norfolk, with the recently announced £600 million devolution deal (County Deal) delivering regeneration and skills powers.  Businesses will be consulted on this deal during 2023 and Norfolk Chambers will work closely with Norfolk County Council to ensure the business voice is heard. Change came to Norfolk Chambers with the passing of the torch in August 2022, as former CEO, Chris Sargisson stepped away, having brought the Chambers firmly into the 21^st century, with lots of new tech innovation and a strong customer centric culture and ethos.  As the new CEO, my job is to continue that journey and build and grow on the strong foundations.   We have also recruited a grand total of eight new Chamber Board members, who bring a wealth of experience and talent to support the rest of the Board, myself and our amazing Chambers Team. Our Business Climate Leaders programme, designed to support businesses on the path to net zero, has delivered a huge range of events, including a really well attended Climate Change Expo in King’s Lynn; created a BCL Board and brought together a cohort of businesses to talk about their experience and to give their knowledge and support to any and every business – all of which is free to access on our BCL Hub.  Our climate change support work will continue into 2023, with new cohorts being created; more climate change events; and an online step-by-step guide to starting your net zero journey. Co.Next launched in early 2022 to empower, engage and encourage young professionals under 35 years of age.  Chaired by James Groves, MD of Indigo Swan, this group has gone from strength to strength.  They have delivered a range of networking events, some amazing speakers, Mentoring Mondays and training events.  The initial Co.Next Advisory Board became Alumni and a new Advisory Board is being recruited right now – so look out in January for the announcements. Engagement Focus Groups is a new initiative launched this September 2022 to enable us to capture the thoughts, feedback and needs of local businesses in a range of market towns, villages and the main conurbations across Norfolk.  We can then use the information to lobby and influence on your behalf.  We started with Norwich, Great Yarmouth and King’s Lynn and will be coming to Diss, Snetterton, Heacham, Holt and many others throughout 2023.  These are free to attend by any business – member or non member and will be supported by Norfolk Chamber Board members and the Chambers Team – you can find the dates for the whole of 2023 on our website – it would be great to see you! All of this activity is on top of our annual flagship events, such as B2B, Talking Tech and the Big Debate, a swathe of networking events, both face to face and online including paddleboarding, netwalking and support for our charity members.  Oh, we also took our AGM on the road and held it at Banham Zoo!  We are now looking for suggestions as to where we could hold it in 2023 – do let us know if you have any good ideas? Everything Norfolk Chambers has done this year and what we will do in 2023 is aimed at connecting, supporting and giving voice to every business in Norfolk.  So, a huge well done to my fabulous Chamber Team who have worked tirelessly to support the Norfolk business community and congratulations to every business on surviving the roller coaster that was 2022. May I wish you all a Merry Christmas and Happy and Prosperous New Year and the Norfolk Chambers Team looks forward to supporting you in 2023. Nova      

Urging Government to provide certainty to businesses on energy support ahead of Christmas, BCC Director General, Shevaun Haviland, said:  “Just over a month ago, the Chancellor promised businesses that they would receive a plan on the future of the energy support package before the end of the year. With 24 hours left until Parliament rises, businesses have one simple question: ‘where is this plan’? “According to a recent BCC survey, almost half (47%) of UK SMEs said they will find it difficult to pay their energy bills when Government support ends. “Firms deserve far better from Government than broken promises for Christmas during these incredibly difficult times. They now face an anxious and uncertain festive period, unable to plan for the New Year. “The Government has repeatedly assured us of their commitment to confidence and stability. However, their failure to stick to their promises and provide businesses with the certainty they need does not fill anyone with confidence, nor does it promote stability. “Government is now left with two options. They can pull a rabbit out of the hat and come up with a plan before they break for Christmas. Or they must explain why they are leaving businesses in the dark. “Without a clear plan before January, many businesses will be left vulnerable to extortionate prices at the end of March, especially SMEs and energy intensive businesses. Those businesses will have no choice but to start preparing their workforce for potential redundancies, leaving employees vulnerable and weakening the economy further. “Now more than ever, we need to provide businesses with confidence so they can invest, grow and power the much-needed recovery of the UK economy in the months ahead.”

As we head into the festive period the team at Norfolk Chambers would like to wish you a wonderful break. We look forward to continuing to support the Norfolk business community in 2023. Please see above our opening hours over the festive season.      

Commenting on the Office for National Statistics inflation figures for November 2022, BCC Head of Research, David Bharier, said: “Today’s inflation rate of 10.7% may indicate we have passed the peak, but prices are now at a much higher level which will be felt for months to come. “Our research shows that inflation remains by far and away the number one concern for businesses. Even if the rate of increase starts to slow, the damage to business confidence has been significant. “With their margins left razor-thin, very few SMEs are planning to increase investment as they deal with a wall of higher energy bills, input costs, interest rates and taxation. “Over half of SMEs tell us they will struggle to pay their electricity and gas bills after April. They will be nervously awaiting the Government’s expected announcement on the future shape and extent of any energy costs support, which will also impact inflation. “Firms also need to see concrete action on infrastructure, skills, trade, and green tech to create the right environment to invest.”

The final three Town Deal business cases have been approved by Government securing the remaining £15,811,819 of funding for the Multi-User Community Hub, Riverfront Regeneration and Active and Clean Connectivity projects. King’s Lynn was one of only 100 towns in England that were invited to bid for Towns Fund money.  A requirement of the funding bid was the establishment of a Town Deal Board.  The King’s Lynn Town Deal Board was established in January 2020. Graham Purkins, Chief Technical Officer at Merxin and Chair of the Town Deal Board, said: “Since our inception in January 2020, our role has been to work with officers and members, bringing our private sector business knowledge and experience to the table, and helping to identify and develop projects that we believed would really help secure a positive future for the town.  We have been responsible for overseeing the development of the business cases and I am delighted that everyone’s hard work has resulted in us securing the full allocation of £25m for the town.  I am very much looking forward to seeing these projects progress through to delivery.” Cllr Graham Middleton, Deputy Leader of the Borough Council of King’s Lynn & West Norfolk, explained: “Securing £25m from the Towns Fund is only part of the story.  Many of the projects also feature match funding, so for a contribution of £1.2m by the Borough Council of King’s Lynn & West Norfolk, we are securing £33.7m of investment in the town, thanks to contributions from other partners and funders, including Norfolk County Council. “I want to thank the Town Deal Board members who have given their time so generously to this project and have helped support officers throughout this process. I must also thank our own officers who have worked hard to develop business cases and consult with stakeholders and the public, to get these schemes supported. “It is also vital that I thank members who have reviewed the business cases and signed them off on behalf of the council.  It’s been a challenging process through a challenging period of time, and I am really proud of what has been achieved.” The next steps are to progress with refining and developing the proposals along with further public engagement and consultation, so that the appropriate planning permissions can be obtained and projects progressed. Michael Baldwin, Vice President of Norfolk Chambers of Commerce said, “The town deal board have worked incredibly hard to get these projects to the delivery phase we are now entering,  and we look forward to west Norfolk finally seeing all of the works coming together over the coming months”.   Information about each of the projects can be found on the Vision King’s Lynn website www.visionkingslynn.co.uk.

Reacting to the ONS GDP figures for October, Nova Fairbank, CEO at Norfolk Chambers of Commerce, said: “The monthly growth in GDP for October of 0.5% is overshadowed by the underlying three-month trend revealed by the data, which shows a contraction in the economy of 0.3%. “As September’s figure was depressed by the Bank Holiday for the Queen’s funeral, October’s data was always likely to show a comparative improvement. “But the BCC’s latest quarterly economic forecast expects the UK economy to be in recession for five consecutive quarters. “Business confidence has been falling dramatically as firms face into a wall of higher prices and energy bills, increased taxation, and rising borrowing costs. “Unless the Government helps create a stable environment to allow businesses to invest, Norfolk faces a long-term loss of competitiveness. “Businesses need to see concrete action to resolve the immediate disruptions facing our economy, such as soaring energy costs and the burdens in our trading relationship with Europe. Nova also said, “Norfolk also needs to see a long-term plan on infrastructure, skills, trade, and green innovation – topics we will be discussing at our upcoming event, The Big Debate on Friday February 10th.”

Reacting to the ONS Trade figures for October, William Bain, Head of Trade Policy at the BCC, said:  “There was a cloudy trade picture in October as goods exports fell again – well short of forecast 2022 growth. “The ONS Trade data shows a 4.7% fall in the value of goods exports, although services held up better. Overall, though, export performance continued to undershoot the OBR’s 8% forecast growth for this year. “After removing inflationary effects, imports rose, particularly from the EU. As fuel market volatility continued, gas and other fuel imports from the rest of the world were down in October. “But with data for 10 of the 12 months of 2022 now in, it’s clear that the scale of growth in exports predicted last October is not happening. “Nevertheless, over the 3 months until the end of this October, exports in both goods and services held up. Energy market fluctuations had an impact on trade data over this period. “With tougher economic conditions most likely ahead, next year will need a step change in efforts by business and government to develop the Export Strategy to sustain trade volumes.”