Chamber News

Commenting on the latest ONS UK GDP figures published today, which show a 0.3% contraction for April 2022, David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:    “The fall of 0.3% in April, following a 0.2% decrease in March, highlights the increasing stress the UK economy is under. All main sectors have seen a fall in growth, the first time since January 2021.   “This decline is the inevitable outcome of surging inflation, supply chain disruption and widespread skills shortages.   “Businesses from all sectors are facing unprecedented rises in raw material costs, soaring energy bills, and wage pressures. The introduction of an increase to employer National Insurance Contributions in April has only further added to firms’ woes.   “This declining output comes off the back of two years of significant damage sustained by small businesses, whose weakened cash positions mean that they are in a far worse position to stomach further pressure. The global aspects to all these problems mean they are likely to weigh heavily on the UK’s prospects for growth for some time.  “Output in consumer-facing services increased by 2.6% in the month, reflecting increased consumer spend on hairdressing and food services. However, the sector remains below pre-pandemic levels, highlighting the significant damage sustained from shutdowns and restrictions.  “Declining business investment remains a serious cause for concern and urgent Government action is needed to halt this fall. Cutting VAT on businesses’ energy bills to 5% would ease the squeeze on firms’ cashflow and give them some room for manoeuvre.”  Responding to the latest ONS Trade figures released today, William Bain, Head of Trade Policy, said:  “It is heartening to see an increase in the rate of exports to the EU and the rest of the world. Nevertheless, continued progress is needed to meet the Office of Budget Responsibility’s (OBR) forecast of a net increase in UK exports of 9% across the whole of 2022.  “On exports to the EU, the welcome increase of 8.8% since March is driven mainly by fuels and, to an extent, by machinery and transport equipment, but exports to the EU in chemicals, food and material manufactures remain flat.    “On the import side, there are early signals on the potential for delays, due to COVID outbreaks centred around major ports in China, which may impact the flow of certain goods into the UK.”  Trade data overview  Exports  UK goods exports accelerated in April 2022 with increases in exports to the EU rising by 8.1% (£1.2bn) and to the rest of the world by 6.5% (£0.9bn). Main factors in increased goods exports to the EU were machinery, transport equipment and fuels (gas and crude oil).  Food, chemicals and material manufactures exports to the EU remained flat in April 2022. OBR forecasts for U.K. export growth in 2022 were 9% and 7% in imports.    Imports  Imports of goods from the EU rose by 4.2% in April driven by increases in machinery, transport equipment and chemicals, but from the rest of the world fell by 2.6% – an overall rise in goods imports of 0.7%. There was a reduction in cars, electrical machinery and other manufactured goods from China.   Trends  Comparing the 3 months to April 2022 with the 3 months to January 2022, goods exports to the EU increased by 15% and to the rest of the world by 2.7% – an overall rise of 8.8%. This is line with OBR forecasts from last autumn for export growth (so far) in 2022. Comparing the 2022 data with that in 2018 – the last stable period before EU exit and changes in methodology – exports were 6.1% higher in the 3 months to April 2022 compared with the 3 months to April 2018.   Early estimates for services exports in Q1 2022 reveal a very modest increase of £0.1bn in that period.   The overall UK trade deficit widened to £21.4bn (ex-inflation) in the three months to April 2022.  Commenting on the latest ONS Labour Market statistics released today, BCC Head of People Policy, Jane Gratton, said:    “An increasingly tight labour market means it’s much harder for employers to fill job vacancies – impacting on their ability to operate normally and retain skills in the business.   “The further rise in the employment rate, together with drop in the unemployment rate are good news but they also reflect how little room for manoeuvre there is for unfilled vacancies on the ground.   “With a new record set for the number of vacancies, and no easy way to fill them for many companies, labour shortages are likely to continue to damage the UK’s growth prospects.  “Despite recruitment difficulties, the damage to firms’ finances from soaring inflation and rising national insurance will limit the extent to which wages can continue rising.     “We need to find ways to bring people back into the UK labour market. Flexible working practices, rapid re-training opportunities and a focus on workplace health can support many economically inactive people to return to the workplace.    “But for some roles, where there is clear evidence of a national shortage of skills and labour, firms need access to people, at all skill levels, from outside the UK. As well as issuing temporary and seasonal visas, the UK government needs to urgently review the Shortage Occupation List.” 

It believes too many smaller businesses are still missing out on export opportunities and says politicians heading to the World Trade Organisation (WTO) Ministerial Conference (MC12) must adopt more practical measures.  It made the call ahead of the start of the four-day meeting in Geneva this Sunday (June 12).   William Bain, Head of Trade Policy at the BCC, said:  “Facing the trade headwinds of the war in Ukraine plus continued supply chain concerns in Asia, smaller businesses need a growth-focused Ministerial Conference in Geneva.   “We urge ministers to take further action on kickstarting e-commerce, improving the commitments on gender equality in trade, reaching agreement on subsidies, and adopting a bold reform agenda to create a trade system which business can more easily engage with, and rely upon.   “It is also vital that delegates do not end the moratorium on customs duties on electronic transmission of goods and services. With the Office of Economic Co-operation and Development and WTO both lowering forecasts for global growth this year and next, the last thing businesses need is the re-introduction of customs duties on electronic transmission.   “They would hurt exporters of UK creative, professional and business services in particular. Leaders in Geneva must deliver practical support to smaller businesses in the UK, and beyond, who are keen to scale up their export capacity in the coming months and sustain global economic growth.”  

The SME community is expected to find time and resources to ‘seek’ and  ‘go figure’ in order to understand, answer and apply new ideas and changes. That’s a big ask so we, a trusted, not for profit organisation want to help every SME business start AND FINISH their net zero journey. We’re delighted to be working with local organisations, and incredible individuals who are helping us, help support Norfolk SMEs on their net zero journey. Find out why our board members are involved with BCL here Everyone in business knows that now is the time to act and every act makes a ‘little by little, bit by bit’ difference so please get in touch via email or by phone 01603 625977.  

A recent survey conducted by the Norfolk Chambers of Commerce has shown that 71% of businesses have started their net-zero journey in some way. Of those who were surveyed, the undertakings of their net-zero journey included buying locally, recycling, using electric vehicles, paperless office, sustainable website hosting, re-useable cups, green pledges, and improved travel plans from staff. 65% of those surveyed said they could dedicate 1-3 hours per month to their net-zero journey and 35% could dedicate 1-3 hours per week. From the findings, it appears that no matter the size of the organisation, all are time poor. Even the larger corporates who could have the resource to develop their journey still selected 1-3 hours per month. Whilst access to finance was stated as a barrier, 71% of those we surveyed, had not yet tried to apply for any funding. Identified barriers to net-zero journey:

• Lack of understanding of approach – how to start and measure the journey
  • Lack of resources and an understanding of how to tackle a company-wide approach. A need to understand how a larger organisation, with a large staff and multiple sites could approach net-zero?
  • Measuring current impact, without incurring the cost of a consultant to help – many small businesses don’t have the budget for that
  • Within aviation, there’s no clear methodology when calculating emissions
  • Bad data quality

• Challenges with Landlords or heritage buildings
  • Legal entanglements between owners of premises and landlords prevent progress
  • Negotiating with the landlord, where for many, their main concern is financial cost.
  • Heritage sites/assets, which can be difficult to retrofit

• Buy-in / lack of engagement from those within the organisation
  • Not getting buy-in to a project from the top of an organisation
  • Lack of interest on the part of others
  • Differing views on the climate emergency between employees.
  • Lack of commitment to see a project through on the client-side

• Financial
  • Lack of understanding on what financial support is available i.e is there any funding from local authorities etc?
  • Grants to aid the net zero journey may not always be as attractive as they first appear. Some businesses have encountered out of date information, empty funding pots, and many stated the time required to process the application and await the award was an issue
  • Many found that large scale procurement framework providers were unreachable – so there was no ability to discuss what could be possible for an SME

• Other Reasons
  • Negative perceptions. e.g. some businesses with electric vehicles were criticised – electricity is generated inefficiently and you are unable to dispose of the main battery at end of life
  • Poor export tariffs to small electricity generators

Whilst there is an ability to debunk some of the perceptions above, it is not surprising that all these contributing factors and barriers, businesses are struggling with where to start and how to achieve net-zero. The Norfolk Chambers of Commerce Business Climate Leaders programme has been designed and developed to help all Norfolk businesses on their road to net-zero with support from experts across the county. Providing a platform for businesses to collaborate and share stories and experiences to build a community of advocates and helping Norfolk as a county on its own net-zero journey.

The Chambers Quarterly Economic Survey (QES), is the UK’s largest independent business survey and is currently open for responses from local Norfolk businesses.

The QES only take a couple of minutes to complete – it is anonymous and your support would be greatly appreciated.

The QES Q2 is open for responses until midnight on Friday 10th June 2022.  Take part in the QES now.

Photo credit: Getty Images/Chamber Canva Pro usage 2022

What You Need Is What We Do. Following its announcement in April, the Government’s Energy Security Strategy has raised the country’s ‘clean energy’ ambitions, increasing the importance of working towards net-zero by 2050, and placing more responsibility on businesses, including SME’s, to contribute towards reducing the impact of climate change. It’s all hands on deck as we Co.llaborate with the Borough Council of King’s Lynn and West Norfolk to help them, help and support local West Norfolk businesses on their net-zero journey. We’re working with their incredible team to launch, share and showcase their upcoming King’s Lynn Climate Change Expo on Tuesday, 21st  June at the Corn Exchange, King’s Lynn. The Climate Expo is a day-long event for not only, businesses but the whole Co.mmunity, with workshops and stands to visit, and it’s free to attend – now is the time to get involved and get Co.nnected with climate change. The aim of the council is to showcase decarbonisation measures available to local businesses and provide advice on how to progress decarbonisation works, to reach the 2050 net-zero target. We have a wide profile of events throughout Norfolk this year and are pleased to include the expo to our summer programme. We launched our Business Climate Leaders (BCL) programme to support Norfolk SME’s starting or continuing their net-zero journey. The BCL program brings together a Co.mmunity of Norfolk businesses and organisations to share and disseminate relevant information that will support businesses in making alternative choices, implementing policy, and changing their behaviours. I’ve spoken recently, saying businesses are more aware than ever that now is the time to take action to tackle climate change, but for many knowing where to start and what to do is difficult to understand and time-consuming. The programme, and the expo are also very much in line with the Chambers vision; to connect support and give voice to every business in West Norfolk. At the Chambers, the objective of the Business Climate Leaders approach is simple; a free-to-access programme for every business, designed to educate, enable and support SMEs to seek, understand and apply appropriate, tested actions and activities that will put them on the path to net-zero. If you can provide services and products to help businesses on their net-zero journey, Co.nnect with us and support West Norfolk businesses reduce their carbon emissions. We have sponsorship and exhibition stand space opportunities available, so get in touch and be part of this sustainable event and raise your profile further across West Norfolk. Call 01603 625977 or email: amy.wright@norfolkchambers.co.uk    

Norwich City Council have released their latest economic barometer. The report highlighted: Locally

• Research from Barclays, showed 84% of small businesses in the East of England are optimistic about their future but more than one-quarter feel anxious after taking on debt for the first time.

• More than one-third of East Anglian medium-sized businesses (40%) intend to expand their workforce over the next 12 months and almost one-fifth plan to pay their staff more in order to attract and retain talent.
• Norwich is continuing its post-pandemic recovery with more shoppers making trips into the city centre compared to early 2020, according to the latest survey from Centre for Cities
• According to plans submitted to Norwich City Council, Bakery chain Greggs could open its biggest store in Norfolk

Nationally

• The Office for National Statistics (ONS) reported that since late 2021, the UK has experienced several changes to contributory factors leading to rising costs for individuals and businesses.
• The latest KPMG and REC, UK Report on Jobs survey signalled a further steep increase in hiring activity at the start of 2022.
• The ONS Opinions and Lifestyle Survey for the period 16 to 27 February 2022 found that 81 per cent of adults reported their cost of living had increased over the last month;
• A doubling in corporate insolvencies in January suggests that creditors are now starting to take action over unpaid debts which they have been legally prevented from pursuing pandemic started, according to the Eastern branch of business rescue trade body R3.

NorwichEconomicBarometer April 22

Reacting to news of today’s measures announced by the Chancellor, Hannah Essex, Co-Executive Director of the BCC, said:   “The sheer scale of the cost-of-living crisis facing the British public means the Government is absolutely right to provide additional support to those worst affected.   “For business, the toxic mix of inflation, raw material costs and supply chain disruption is the flip-side of the coin to the problems facing consumers.   “Unless steps are also taken to ease business costs, they will likely feed into the inflationary pressure on the economy and quickly eat into the financial support announced today.  “A reduction in VAT to 5% on businesses’ energy bills would directly alleviate some of this pressure to raise prices.  “The Treasury must urgently consider the actions set out in our call for an Emergency Budget which would provide a way to break the inflationary cycle.  “If we can ease the pressure on businesses then they can keep a lid on the price rises.  Firms will then have the breathing space they need to raise productivity and strengthen the economy.  “But a change, of course, is needed now. If the government does not act quickly then rising costs will put our economy in a stranglehold.”  

We are delighted to welcome eight new Board members to join our existing Board. Following their recruitment, an induction to the Chambers, our team and the current Board took place on Monday 16^th May 2022 hosted by Paul McCarthy, Vice President of the Board and General Manager of Chantry Place. The eight new Board members are: Lexi Brackpool – Managing Director of Furthermore Marketing Carole Burman – Managing Director of MAD-HR Kelly Cartwright – Owner of Core Recruiter Gez Chetal – Owner of Thomas Paine Hotel Lizzy Dring – Head of Corporate events at Huxley Events Neil Foley – Owner of Business Growth Club Simon Girdlestone – Chief Commercial Officer of Solinatra James Howells – Director of Turning Factor They will be joining the current Board members: Lynsey Sweales – CEO at Social B (President) Paul McCarthy – General Manager of Chantry Place Shopping Centre (Vice President) David Armstrong – CFO at Flagship Housing Group (Treasurer) Michael Baldwin – General Manager of Bank House Hotel (WN Chamber Council President) Jonathan Cage – Managing Director of Create Consulting Engineers Helen Lewis – Director of Research and Innovation Division at University of East Anglia Chris Sargisson – CEO of Norfolk Chambers of Commerce Glen Webster – Area Business Manager at Barclays Bank Lynsey Sweales, President of the Board says, “To support businesses in Norfolk successfully, we not only have to have our finger on the pulse but have the eyes and ears represented on the board.  I’m delighted that our latest board recruitment puts the Chambers in an even stronger position to take us to the next stages and innovations of what businesses want and need to see from us.  Paul and I were really impressed with not only the calibre of applications but the passion and drive that Gez, Lizzy, Carole, Kelly, Lexi, James, Simon and Neil had towards helping businesses in the region.” Having a diverse board from all sectors and experiences and geographic coverage will bring insights and support to the Norfolk Chambers of Commerce.  We are also delighted to bring a much younger age range, as well as diversity and equality to our Board. Lexi Brackpool, Managing Director of Furthermore Marketing “I’m really excited to join the Chamber board and support the Chamber in growing its membership and further digitalisation of its services for greater accessibility.” Carole Burman, Managing Director of MAD HR says: “I am deeply honoured to be invited to join the Norfolk Chamber of Commerce Board.  We have a growing number of clients who are based in Norfolk, and I very much hope my role on the board will continue to ensure the voices of these and so many organisations can be reflected and heard on both local and national issues.” Kelly Cartwright, Owner of Core Recruiter says “I’ve noticed that the more successful you are, the more forceful and vocal people are with their opinions. And I’ve realised that the sad truth is that there are plenty of people who want to see you fail. I want to be a part of an inclusive, supportive Norfolk community that encourages and champions everyone. We all have our strengths and weaknesses’ but we should have a network around us, that we can lean on, and use other people’s strengths to help us.” Gez Chetal, Owner of Thomas Paine Hotel says “Highly honoured so that I can help society and others businesses to succeed with my knowledge and expertise.” Lizzy Dring, Head of Corporate Events at Huxley Events says “I feel incredibly lucky to have the opportunity to work with such a thriving and supportive organisation with an amazingly bright future. The journey over the next few years is definitely going to be exciting and I’m looking forward to helping represent the voice of Norfolk businesses to help the Chambers go from strength to strength (especially SME’s, female led businesses and supporting young people in business).” Neil Foley, Business Growth Club “The more we can stimulate the economy the better for all of us” Simon Girdlestone, Chief Commercial Officer of Solinatra UK says: “I am very pleased to be appointed to the Norfolk Chambers Board, having lived in Norfolk my whole life I really wanted to get involved to help local businesses thrive, particularly in the manufacturing sector.” James Howells, Director of Turning Factor “By joining the Chambers Board, I hope this will allow me to make a considerable contribution towards Norfolk’s economy.”  

• Four out of five employers (81%) say they have been impacted by the increase in National Insurance contributions
• Higher prices, reduced investment and increased staff costs were among the main effects cited
• Employers expect wages to increase by a median average of 5% over the next year

Research carried out by the British Chambers of Commerce, of more than 1,100 UK employers, has uncovered a series of negative impacts from the increase in National Insurance contributions. Firms said the rise in employer contributions to National Insurance (NI) from 13.8% to 15.05% had increased staffing costs, forced some to put up their prices, and meant they would be limiting their investment. As part of its call for an Emergency Budget, the BCC is calling for the rise to be immediately reversed for at least a year, as firms battle surging costs on multiple fronts. The BCC is calling for action to give businesses a chance to keep a lid on rising prices, boost productivity and ease cost pressures. Hannah Essex, Co-Executive Director of the BCC, said:  “Businesses are telling us that the rise in National Insurance contributions has been a body blow as they try to get back on their feet. “When firms are already facing a toxic mix of surging inflation, rising energy costs and supply chain disruption, this increase is very hard to swallow. “The tight labour market is already pushing up staff costs and the NI rise has only served to exacerbate that pressure, without having a positive impact on recruitment. “With firms’ profits also taking a further hit, after two years of the pandemic, it is no surprise that their investment intentions are also weakening. “But it is not too late to change tack and push the increase back until firms are in a better place to take on the extra burden. “The costs crises facing firms and people in the street are two sides of the same coin. If we can ease the pressure on businesses, then they can keep a lid on the price rises. “Acting now will also put businesses in a better position to create the future profits needed to fill tax coffers.” The other two Emergency Budget proposals include:

• Help firms manage the impact of rising energy prices by cutting VAT on their energy bills from 20% to 5% for a minimum of one year.
• Address labour shortages by reinstating free Covid tests for companies to ease the strain on productivity caused by persistent high absences

Photo credit: Getty Images/Chamber Canva Pro usage 2022

Commenting on the ONS Labour Market statistics for May 2022, BCC Head of Economics, Suren Thiru, said:  

“Although payroll employment continues to rise and the unemployment rate is falling, the headline figures more reflect several distorting factors, including rising economic inactivity, rather than the reality on the ground. 

“Record jobs vacancies highlight the perilous hiring crunch facing businesses. With rising economic inactivity confirming that the UK workforce is shrinking, labour shortages are likely to persistently drag on UK growth by stifling firms’ ability to operate at full capacity. 

“Although total earnings growth rose sharply, the robust headline figure more reflects strong bonus payments rather than a meaningful improvement in underlying wage growth. Despite recruitment difficulties, the damage to firm’s finances from soaring inflation and rising national insurance will limit the extent to wages can continue rising.  

“While demand for workers is currently strong, the squeeze on firms’ finances from soaring energy bills, surging inflation, and the increase in national insurance is likely to weaken recruitment intentions and weaken wage growth in the near term. 

“An emergency budget is urgently needed to give firms the breathing space to recruit and retain staff, including reversing the recently introduced National Insurance increase until at least the next financial year.” 

Responding to the details of the Government’s legislative plan set out in today’s Queen’s Speech, Shevaun Haviland, Director General of the BCC, said:  “Today’s Queen’s Speech had some welcome measures for business, but unless the Government takes immediate action on the economy, they will come too late to help many firms.  “An emergency budget is needed to provide firms with the breathing space they need to raise productivity and strengthen the economy.  “The costs crises facing firms and people in the street are two sides of the same coin. If we can ease the pressure on businesses then they can keep a lid on the price rises being driven by surging energy bills, staff shortages and higher taxes.  “Only after an emergency budget will some of the legislation set out in the Queen’s Speech have a chance to drive our economy forward.  “Businesses will then be able to focus on supporting the missions set out in the Levelling Up and Regeneration Bill, as well as reaping the benefits from the infrastructure programmes outlined today. However, to really speed up delivery of infrastructure projects, much wider reform of the planning system is needed to speed up the process and reduce complexity.  “The Higher Education Bill gives a welcome commitment to create a flexible lifelong loan entitlement that allows adults to upskill and reskill for the changing workplace. Funding for modular learning is crucial to help people gain technical skills and ensure employers can access a skilled workforce.   “The Brexit Freedoms Bill has the potential to unlock innovation and expansion in a range of new and developing technologies, especially the expanding world of Net Zero products and services.  “We will want to look closely at how any changes will help business domestically but also their impact on our trade links and exports with the EU.  “What we don’t want to see is deregulation for its own sake. We should not complicate our trading relationship by diverging so far it makes UK goods and services unsellable into Europe.