Chamber News

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

• Lotus, based at Hethel outside Norwich, has unveiled its best annual global retail sales performance since 2011.
• Ashtons Legal, one of the region’s largest law firms, is to acquire Norfolk-based Steeles Law in a merger which will increase its team to 400 people. The combination will add Steeles’ office in Diss, to Ashtons’ existing offices in Norwich, Bury St Edmunds, Cambridge, Ipswich and Leeds.
• Business sentiment improved in December and employment levels rose at a faster pace as private firms in the East of England stayed confident about higher activity levels in 2022.
• Manufacturing exports from the region could rise significantly over the next decade if plans by firms to sell more goods overseas materialise according to a new study – The Export Dividend – from Barclays Corporate Banking.

Nationally

• The UK economy grew more slowly than previously thought in the third quarter, suggesting a shaky recovery even before the outbreak of the Omicron variant.
• December PMI data pointed to another solid increase in business activity across the UK construction sector, but the rate of expansion slipped to its lowest since September.
• UK households have suffered the sharpest fall in the amount of cash they have available to spend for almost eight years, amid a worsening cost of living crisis driven by high 5 inflation and rising energy bills.
• The number of insolvent businesses in England and Wales rose by 18.7 per cent last month to 1,674, up from 1,410 in October and an increase of 88 per cent on November last year

For full details of the latest economic barometer see below.  norwicheconomicbarometer_3.pdf

Headlines •   UK GDP growth is to halve this year amid inflation, tax rises, and global headwinds •   Consumer spending downgraded with inflation to outpace wage growth until 2024 •   UK inflation to rise to 8% with interest rate rises expected to double this year UK’s economic growth forecasts downgraded… The British Chambers of Commerce has downgraded its expectations for UK GDP growth in 2022 to 3.6%, from 4.2% in its previous forecast in December 2021 and less than half the growth of 7.5% recorded last year. Following Q4 2021 growth of 1.0%, quarter-on-quarter GDP growth is forecast to slow to 0.7% in Q1 2022, then to 0.2% in Q2 and 0.1% growth in Q3. The downgrade largely reflects a deteriorating outlook for  consumer  spending  and  a  weaker  than  expected  rebound  in  business  investment,  amid  soaring inflation, major tax rises, and the impact Russia’s invasion of Ukraine. Following forecasted GDP growth of 3.6% this year, UK economic growth is expected to slow sharply again to 1.3% in 2023, before easing to 1.2% in 2024. …largely reflecting a weakening outlook for consumer spending and business investment… Consumer spending is forecast to grow at 4.4% in 2022, down from its previous forecast of 6.9%. The downgrade  reflects  the  historic  squeeze  on  household  real  incomes  from  high  inflation.  Inflation  is projected  to  outpace  wage  growth  until  Q2  2024,  maintaining  the  squeeze  on  household  finances. Business investment is forecast to grow at 3.5% in 2022, down from the previous forecast of 5.1% The downgrade reflects the expected weakening in investment intentions from rising cost pressures, higher taxes and weakening confidence amid deteriorating UK and global outlooks, including the current impact of Russia’s invasion of Ukraine. …and inflation forecast to rise 8% this year. Rising raw material costs, the increase in the energy price cap, the reversal of the hospitality VAT cut and upward pressure on energy and commodity prices from the current impact of the Russian invasion are expected to lift CPI inflation to a peak of 8% in Q2 2022. If realised this would be the highest rate since July 1991. Rising raw material costs and the impact of Russia’s invasion of Ukraine are also projected to keep UK inflation higher for longer. CPI inflation is expected to fall back to the Bank of England’s 2% target in Q4 2024, over a year later than the previous forecast of Q2 2023. “Our latest forecast signals a significant deterioration in UK’s economic outlook. The UK economy is forecast to run out of steam in the coming months as the suffocating effect of rising inflation, supply chain disruption and higher taxes weaken key drivers of UK output, including consumer spending and business investment.  Russia’s  invasion  of  Ukraine  is  like  to  weigh  on  activity  by  exacerbating  the  current inflationary squeeze on consumers and businesses and increasing bottlenecks in global supply chains. The BCC’ latest outlook suggests a legacy of Covid, and Brexit is an increasingly unbalanced economy with a growing reliance on household spending to drive growth. Such economic imbalances leave the UK more exposed to economic shocks and reduces our productive potential. The downside risks to the outlook are increasing. Russia’s invasion of Ukraine could drive a renewed economic downturn if it stalls activity by triggering a sustained dislocation of supply chains or a more significant inflationary surge. Tightening monetary and fiscal policy too aggressively risks weakening UK’s growth prospects further by undermining confidence and damaging household and firm’s finances.” Suren Thiru, Head of Economics, British Chambers of Commerce See full report below.  bcc_briefing_note_2022q1.pdf

Humanitarian aid to Ukrainian refugees HMRC understands that people in the UK want to help those affected by the invasion of Ukraine and we are aware that the British public has already responded with immense generosity, donating millions of pounds to support those impacted by the war. However, in line with advice from the Foreign Commonwealth and Development Office and the Charity Commission, HMRC recommend that individuals and organisations wanting to help should give money through the Disasters and Emergencies Committee campaign (launched on 3 March) and other trusted charities and humanitarian aid organisations, rather than donating goods and seeking to send or drive them to the region. Disasters and Emergency Committee has launched their Ukraine fund and the UK Government has pledged to match public contributions from the public pound for pound, up to £20 million. More information can be found here https://www.dec.org.uk/appeal/ukraine-humanitarian-appeal and eligible UK taxpayers can Gift Aid donations. Advice for businesses Most goods crossing borders require customs declarations and may be subject to checks. Duty and other border taxes may be payable on entry into other customs territories, such as the EU. This includes goods donated to charities, such as food, blankets and clothing (known as ‘in kind assistance’). If you send goods to Ukraine, or the surrounding countries, to support those affected by the invasion without following export and import processes, your donations could be delayed getting to people in need. HMRC strongly encourage organisations wishing to support efforts in Ukraine, and in the surrounding countries, to follow FCDO advice and make a financial donation through a trusted charity. UK businesses can contact the Export Support Service (ESS) which the Department for International Trade has expanded to act as a single point of enquiry for businesses and traders with questions relating to the situation in Ukraine and Russia. The ESS helpline number is 0300 303 8955 and is currently operational Monday to Friday 0800-1800, or support can be accessed online at https://www.gov.uk/ask-export-support-team. Advice for charities We know that many charities have launched emergency funding appeals to provide humanitarian aid in Ukraine and we strongly advise organisations in the UK to focus on financial aid. The Charity Commission has published guidance for charities fundraising for Ukraine – https://www.gov.uk/government/news/statement-on-ukraine-crisis-andits-im…. Like businesses, charities will need to follow UK export guidance and comply with any import rules and pay any taxes or duty owed in the EU or other country that the goods are being sent to, including Ukraine. If you send goods to Ukraine, or the surrounding countries, to support those affected by the invasion without following export and import processes, your donations could be delayed getting to people in need. We strongly encourage organisations wishing to support efforts in Ukraine, and in the surrounding countries, to follow FCDO advice and make a financial donation through a trusted charity. UK businesses (including charities) can contact the Export Support Service (ESS) which the Department for International Trade has expanded to act as a single point of enquiry for businesses and traders with questions relating to the situation in Ukraine and Russia. The ESS helpline number is 0300 303 8955 and is currently operational Monday to Friday 0800-1800, or support can be accessed online at https://www.gov.uk/ask-export-support-team. Moving humanitarian goods from Great Britain to the EU. There is support available for moving goods and HMRC has useful step-by-step guides that help to understand the processes for exporting goods, along with general information on the export declaration process online at www.gov.uk/topic/business-tax/import-export. The UK Tariff provides details of how to complete an export declaration and the different procedure codes that can be used when exporting goods. Further information on the UK export tariff requirements can be found at https://www.gov.uk/government/publications/uk-trade-tariff-exports and https://www.gov.uk/government/collections/uk-trade-tariff-volume-3-for-c…. Export custom procedure codes for CHIEF can be found at https://www.gov.uk/government/publications/uk-trade-tariff-customs-proce… and for CDS at https://www.gov.uk/government/publications/appendix-1-de-110-requested-a… and https://www.gov.uk/government/publications/appendix-2-de-111-additionalp…. The Customs & International Trade Helpline (0300 322 9434) is also available for help with questions about exporting with support also available online – https://www.gov.uk/government/organisations/hm-revenuecustoms/contact/cu…. The management of EU import and export procedures is the responsibility of the customs authorities of the EU Member States that the humanitarian goods are entering into or leaving. We would advise businesses and individuals to confirm the processes with the relevant Member State and any conditions or procedures that may apply. More information can be found at https://ec.europa.eu/taxation_customs/home_en. While customs processes will still need to be followed for moving goods, both the EU and UK provide for relief from customs duty on humanitarian goods. As these donations are moving from Great Britain to the EU, there are no UK duty or VAT liabilities at export but there may be upon entry to the EU, so the EU relief would be applicable. Photo credit: Getty Images/ Chamber Canva Pro 2022

Force Majeure are certificates attesting the existence of force majeure circumstances i.e. circumstances beyond the control of the applicant such as fire, flood, industrial disputes, pandemic, wars and conflicts etc. Please note that we can only certify factual details that can be evidenced. We cannot comment as to whether or not Force Majeure applies or argue such claims on behalf of the applicant. It is the responsibility of the applicant to claim Force Majeure and the issuing body’s role is to provide a certificate in support of such claim. How you apply to your Chamber for a Force Majeure Certificate

• Email a letter confirming details of the force majeure circumstances and the scope of non-fulfilment of contractual obligations due to these circumstances, signed by the company director, to export@norfolkchambers.co.uk

• This will need to be backed up by documents by the competent authorities or verifiable sources attesting to the existence of the force majeure circumstances (not required if circumstances are related to invasion of Ukraine)
• We will produce a draft letter and email it to you for approval.
• The letter on Chamber headed paper will be stamped with the Chamber logo stamp and released once we have received the payment

If you have any queries regarding the details above please contact our International Trade Department, who will be happy to help you. Telephone: 01603 729716  Email: export@norfolkchambers.co.uk   Photo credit: Getty Images/Chamber Canva Pro usage 2022

Last Friday saw the celebration dinner for the King’s Lynn Mayor’s Business Awards at the Corn Exchange in King’s Lynn.  The sell-out event saw many amazing local businesses scoop a range of awards, including: Small Business of the Year; Apprentice/Trainee of the Year; Customer Care; Independent Retailer; Business Innovation; Business Person of the Year and the Mayor’s Business of the Year. Congratulations to all the deserved winners and particular congratulations for Michael Baldwin, owner of the Bank House Hotel and our President of West Norfolk Chamber, who was awarded Business Person of the Year!

Reacting to the signing of the UK-New Zealand Free Trade Agreement, William Bain, Head of Trade Policy at the BCC said: “The BCC welcomes the signature of the UK-New Zealand free trade agreement today. This will mean zero-tariff trade for UK exporters with customers in New Zealand once the agreement enters into force early next year. It will also be easier for SMEs to access the New Zealand market as paperwork and red tape are reduced through modern provisions on digital trade. The FTA should be worth up to £800m to the UK economy and raise bilateral trade by around 60%. “We also welcome the opportunities for business travel and being able to provide services in New Zealand on an equal footing together with a new entry route to facilitate this. “The agreement will also boost trade in environmental goods and services – essential for the transition to Net Zero. “We will engage with businesses in the UK and New Zealand to discuss the many plus points of this agreement, and hope to see it force as soon as possible.”   Image credit: Chamber Canva Pro usage 2022  

The invasion by Russia of Ukraine is an appalling act of aggression with terrible loss of life and displacement of potentially the largest number of people in Europe since World War II. We understand that people across the Chamber Network and member companies will be sickened and upset by the consequences being witnessed each day. The situation for businesses who operated in, or with clients or customers, in Russia and Belarus, is moving quickly. All UK, EU and most of wider European airspace is closed to Russian flights. Major shipping lines including Maersk are not taking containers either to or from Russia. Russia-linked ships will not be allowed access to UK ports. Many Russian banks are excluded from the Swift payments system. Further sanctions were announced by the Chancellor of the Exchequer on Monday morning on economic activity underpinned by the Russian Central Bank. Please see our Q&A on trade and the war in Ukraine available here.  Please see our updated holding statement on Ukraine available here While it remains a moral and commercial decision for UK companies on what actions to take under any contracts with Russian (or Belarussian) customers or suppliers covering goods and services not under sanctions, it will become more difficult for any trade to be conducted within hours much less days. We are pressing the UK government to produce guidance to UK business in terms of the War in Ukraine. For now, some of you have spoken with us about review of contracts which some member companies have conducted, in particular about any force majeure clauses which may cover war conditions, to cover non-performance of contractual terms while the force majeure conditions apply. We are supporting the leadership of the British Ukrainian Chamber of Commerce who are now in London. We have asked them for guidance on appropriate aid routes that we may wish to support as a Network. Further details will be shared shortly. British Chambers of Commerce

The partnership between Norfolk Chambers of Commerce and King’s Lynn-based Uptech will provide Norfolk businesses with more opportunities to improve their cyber security and IT systems. James Fowler, Business Development Manager at Uptech said, “The Strategic Partnership has been in gestation for a few months now, and to have it ready to go, is really exciting! The Chambers events are truly excellent, we want to feed off that group energy, and channel it back into West Norfolk by further sharing our knowledge and expertise.” Uptech saw a very successful year in 2021 achieving Cyber Essential + and Microsoft Gold Partnership, and, finishing in the Top 5 in the country for Managed Service Provider for the year was fantastic recognition for them. With such a positive year behind them, they are focussing on the coming year ahead, “We’re really excited by what 2022 will bring. Over the next year, we’re planning a series of lunch and learn events as part of our partnership, and this firmly cements us as experts within our field,” said Fowler. Managing Director Jason Carlton who is keen to get involved with the Business Climate Leaders programme said, “We’re very passionate about our net-zero journey, we have been 99% paperless for five years and we take notes on tablets and only print when absolutely necessary, we’re looking forward to developing our commitment as Strategic Partners.” Chris Sargisson, CEO of Norfolk Chambers of Commerce said: “This is an exciting time for Norfolk Chambers, and being able to have partners such as Uptech will mean that we can co.nnect with businesses on another level. Cyber security is so incredibly important to all businesses and can cause devasting impacts if not managed correctly. I’m excited to see the co.llaborations that will take place between Uptech and our members, providing support and peace of mind to many Norfolk businesses.” Find out more about Uptech

Way to Work is a new partnership between the government and employers to get 500,000 jobseekers into work by the end of June 2022. This partnership will help fill record numbers of vacancies, supporting job-ready people into the labour market and helping them progress into a career. Whether you’re a job seeker finding your way back into work, or an employer who’s looking for a way to get the right person to help their business, Jobcentre Plus and Way to Work can help. More information can be found by clicking on the below links: https://www.gov.uk/government/news/new-jobs-mission-to-get-500-000-into-work https://jobhelp.campaign.gov.uk/way-to-work/?gclid=EAIaIQobChMIqtvT1rKT9gIVSe3tCh3_8wGdEAAYASAAEgKH5vD_BwE&gclsrc=aw.ds You can contact the Jobcentre Plus Employer Services Line by phone or by email. Employer Services Line employer.services@dwp.gov.uk Telephone: 0800 169 0178  way_to_work_-_an_introduction_for_employers.pdf

Yesterday the UK announced the following sanctions against Russia:

• Asset freeze on major Russian banks
• Legislation banning Russian govt & companies from raising money in UK
• More oligarchs sanctioned
• Sanctions on major Russian companies including Rostech
• Aeroflot ban
• Ban on high tech exports to Russia
• Limiting deposits Russians can hold in UK bank accounts
• Bringing forward parts of economic crime bill

Hannah Essex, Co-Executive Director at the British Chambers of Commerce, said:  “With the dreadful news coming out of Ukraine today, all of us at the BCC hope there will soon be a peaceful resolution. Our thoughts are with all those affected in Ukraine and across our Global Network. “The situation in Ukraine will be deeply worrying for many businesses in the region as well as here in the UK. International leaders must focus on seeking a swift resolution to end the invasion and return to peace. “The British Chambers of Commerce will work closely with the UK government to ensure that businesses have all of the advice, information and support they need to make decisions, adapt to these circumstances and navigate the challenging times ahead.” On the impact on trade and the economy, William Bain, Head of Trade Policy, said: “Alongside the enormous human cost, the Russian invasion of Ukraine will create a significant shock to the world economy by weakening global demand, damaging international financial markets and adversely impacting the UK economy. “The UK energy market has a lot less direct exposure to Russian gas supplies than most of Europe. But, as the global market is already tight, a scramble to source supplies will very likely result in further rises to prices in the UK. “There is also a risk of further disruption to global supply chains, particularly those crossing through Russia and Ukraine, with closure of air space likely to have a significant impact on the movement of goods and people. “The cumulative effect of all of this will likely be higher imported inflation and weakening trade flows. “There could also be some supply chain disruption to manufacturers if some items cannot be exported in the event of hostilities and alternative supply sources cannot easily be obtained. This would inevitably further increase cost pressures and limit economic activity.” UK-Ukraine Trade  Trade between the UK and Ukraine to the year-end of Q2 2021 was £1.6bn in total. Four fifths of this is in goods – with imports of iron and steel (about a quarter of all Ukrainian goods imports to the UK), cereals and grains (22%), vegetable oils and fats (15%), oil-seeds/oleaginous fruits (14%), and animal feed (3%). Key U.K. exports to Russia are machinery, nuclear reactors, boilers ($743m in 2020), vehicles ($504m in 2020), pharmaceuticals ($293m), electrical & electronic equipment ($153m).

Responding to the Prime Minister’s statement to Parliament on the ‘Living with Covid’ strategy, BCC Co-Executive Director, Claire Walker, said: “Businesses will welcome the ambition of the Prime Minister, which inches us closer to pre-pandemic trading conditions. However, for many firms, this move will not be without its challenges and Government must not pass public health decisions on to the business community, who are not public health experts. On testing “Members continue to tell us that access to free testing is key to managing workplace sickness and maintaining consumer confidence. If the government is to remove this, companies must still be able to access tests on a cost-effective basis. New Guidance “We look forward to consulting with Government to help shape the new guidance for businesses that will be developed. It is critical that a variety of issues and scenarios be fully addressed by this. Businesses need clarity if they are to operate at maximum capacity, as well as keep consumers and employee’s confidence high. Future outbreaks “Businesses also need to understand how Government will respond to further variants of concern – or indeed a future pandemic – and what support would be put in place if new guidance or mandatory restrictions are introduced that have a negative impact on the economy. “Firms will only truly be able to ‘Live with Covid’ when they are confident that a plan is in place for future outbreaks. Uncertainty will put a brake on investment and the shadow of the pandemic could continue to loom over our economy for some time to come.”

Commenting on the inflation statistics for January 2022, published today by the Office for National Statistics, Head of Economics at the BCC Suren Thiru, said: “Rising inflation highlights both the cost-of-living crisis facing households and the uphill struggle for businesses to keep a lid on price rises amid surging cost pressures. “While the headline annual figure remains at a 30-year high, the decline in monthly inflation in January offers some hope that we may be nearing the peak in the current spike in inflation. “Inflation should peak at over 7% in April as reversal of the hospitality VAT cut and the energy price cap rise enters the calculation. However, the current Russia-Ukraine tension could keep inflation higher for longer by triggering a further surge in wholesale energy costs. “Rising inflation could well be a significant drag anchor on UK economic output this year by weakening consumer spending power and damaging firms’ finances and ability to invest. “Increasing inflation means that a March interest rate rise is expected. However, tightening monetary policy too quickly risks undermining confidence and the wider recovery and will do little to curb the global factors behind the current inflationary surge. “More needs to be done to limit the unprecedented rise in costs facing businesses, including financial support for those struggling with soaring energy bills and delaying April’s National Insurance rise.”   Photo credit: Getty Images/Chamber Canva Pro usage 2022