Chamber News

The Prime Minister, Theresa May will trigger Article 50 on Wednesday 29 March 2017.  This will start the process to take the UK from out of the European Union.

Whilst many predicted that Brexit would cause a crisis for the UK’s economy, the reality is that, apart from an initial significant slump in the Pound, and its  continued reduced value, the overall UK economy grew by 1.8% in 2016.

Norfolk’s most successful businesses recognise the need to stay positive and be able to take advantage of a whatever situation the economy finds itself in.  They understand that there are opportunities in times of uncertainty, as well as risks.

Commenting on the position of his company, in relation to Brexit, Gordon Chetwood, Managing Director of Pasta Foods Ltd said:  “Pasta Foods has seen an upward path since the UK’s Brexit vote. Most of our pasta competitors are European businesses supplying into the UK, so the devaluation of the pound makes us more competitive to UK customers, in spite of the fact that we have faced rising costs as we buy raw materials from Europe.

“In our snack business, we export snacks across the world to over 40 countries and we have seen very good sales growth in spite of raw material cost inflation and we anticipate that this will continue into the future.”

For the next edition of the Norfolk Voice magazine, we want to hear from more Chamber members about the impact of Brexit on them.  What they have been doing, as a result of Brexit, and what plans they have to take advantage of future opportunities.

Has your company taken advantage of the lower Pound and increased your exports; are you looking at new markets; or trying to source new suppliers – perhaps from within the UK?  What future opportunities do you see as a result of Brexit?

Also, what does your business need to see from the Brexit negotiations?  Just a few of the business comments we have heard so far include: the overall need for clarity; a bureaucratic-free system for EU workers; simplified regulations post Brexit and a reduction in red tape; and to keep tariffs with the EU to a minimum.

Please send your comments to Nova Fairbank.  Email: [email protected] by no later than close of play on Friday 31 March 2017.

The removal of 24-hours lights from the A140 Cromer Road after the completion of major gas diversion work has provided a short respite for motorists, but signals will be in use again for the rest of this week (from Thursday 23 March).   The signals will only be in use when needed to provide a safety zone while 34 beams are lifted into place on the bridge that will carry the A140 over Norwich Northern Distributor Road. These lifts can be delayed by any wind stronger than a moderate breeze, and although the reinforced concrete beams may all be in place by Friday evening, it is possible that work will have to continue into the weekend. B1149 Holt Road 24-hour signals 

From Tuesday 28 March (corrected) 24-hour traffic lights will be in place at the roundabout construction site where Holt Road will connect with the realigned Drayton Lane, south of Horsford. These will be two-way lights, except for a period on 3-4 April when they will be four-way at the crossroads with Church Street and old Drayton Lane. The traffic lights will remain in use until the four-day closure (10-13 April) of Holt Road for the final surfacing and tie-in of the new Drayton Lane roundabout. The only access road at the southern end of Horsford will be Church Street to the A140 Cromer Road. Norfolk County Council and Balfour Beatty apologise for the disruption and inconvenience these unavoidable traffic management measures will cause to road users.

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

Locally

• Lloyds Bank Regional PMI survey showed that business activity in the East grew more quickly than the UK average.
• The weak pound continued to have an effect on costs with the average price for raw materials, salaries and fuel rising at a fast pace.
• More new companies were registered in Norfolk and Suffolk during 2016.  Those registered in Norfolk rose by 5.8%.
•  Work is underway on a new 25-acre site to extend Sweetbriar Retail Park – this should create between 60-90 new jobs.

Nationally

• UK Manufacturing sector experienced solid growth of production and new orders during February.
• UK construction companies recorded improved activity in February, which civil engineering replacing house building as the main growth driver.
• UK Service sector continued to grow, but growth had ease possible due to more cautious consumer expenditure
• The number of people on zero-hours contracts has reached a record high of 910,000 – this is an increase of 14% from 2015 to 2016.

For full details of the latest economic barometer click here.

The Chamber team spent Thursday (23 March) out of the office on a day of fun and team-building.

We started the day at Quasar Norwich by splitting into two equal teams and shooting lasers at one another. It was great fun, with the red team (Jason, Jack, Nova, Emily, Naomi, Tina and Julie) coming out victorious over the blue team (Caroline, Jake, Joe, Louise, Darcy, Philippa and Jenny) in both games.

Food was next on the agenda as the team arrived at Chamber member The Library Restaurant for a well-earned lunch.

The team finished the day with some puzzling solving in the History Mystery Escape Rooms (another Chamber member) at the Norwich Guildhall. Team A (Jack, Joe, Tina, Julie, Caroline, Louise and Jenny) completed both puzzles with time to spare earnig them a silver and a gold badge. Team ‘Chambe Detectives’ (Jason, Jake, Nova, Darcy, EMily, Naomi and Philippa) managed to come away with a silver badge after completing their second puzzle, but with over 5 minutes to spare!

Both before and after the referendum vote last year, the idea was mooted that the UK could always fall back on World Trade Organization (WTO) rules if it failed to agree a deal with the EU.

However, CBI President Paul Drechsler warned his audience at the Lord Mayor’s recent Business and Investment dinner, this scenario would have disastrous consequences.

“Wherever I go across Europe, I hear concerns about the UK leaving without a deal and falling into WTO rules,” he said. “We should be under no illusions about what this would really mean. A ‘no deal’ scenario would open a Pandora’s Box of economic consequences.”

The UK would face tariffs on 90% of its EU exports by value and a raft of new regulatory hurdles, Mr Drechsler claimed.

Some firms are getting ready for this possibility in order to reduce economic damage, he continued, while some are sitting tight and hoping for a deal.

“But in reality,” Mr Drechlser said, “many firms can’t prepare because the cost of change is simply too high to even consider it.”

Whether you’re a salmon farmer in Scotland, an aerospace giant in the Midlands or a tech start-up in Cambridge, he went on, Brexit will affect your business so the CBI is busy talking to Ambassadors from other EU countries, as well as sister organisations in France, the Netherlands, Ireland, Germany and Malta.

Because leaving without a deal would bring significant tariff and regulatory barriers to trade, Mr Drechsler concluded, business strongly supports the Government in its ambition to secure an ambitious trade agreement with the EU.

The funding bid that is to be submitted to central government by Norfolk County Council is greatly welcomed by Norfolk Chamber members.  The document could pave the way for construction of a long-awaited third river crossing for Great Yarmouth starting in 2020.  For many years, the Great Yarmouth Chamber Council has campaigned for a third river crossing, with successive Great Yarmouth Chamber Council presidents calling for investment to support greater economic growth in the town.

The Great Yarmouth Chamber Council has worked in partnership with local businesses, the Borough Council of Great Yarmouth, Norfolk County Council and the New Anglia LEP to pull together support for the business case which is now being finalised and is expected to be submitted later this month. The Department for Transport is expected to make a decision during the summer on whether to grant the project ‘programme entry’ status and award the County Council further funding to develop the planning application and detailed surveys and design work for the third river crossing.

Norfolk County was awarded more than £1 million last August by the Department for Transport to develop an outline business case for a new road bridge across the River Yare. Since then, the County Council in conjunction with its partners, including Norfolk Chamber, have been gathering evidence and galvanising support for the project, using traffic surveys, a public consultation and gaining the backing of local business and community leaders.

Nova Fairbank, Public Affairs Manager at Norfolk Chamber of Commerce, said: “A third river crossing in Great Yarmouth will help to improve that connectivity and create thousands of new jobs. It will improve links across the town and to the rest of the region and reduce congestion. All of which will save businesses time and money, whilst allowing them to increase economic growth.”

Mark Goodall, New Anglia Local Enterprise Partnership Board member, said: “The case we are making is a compelling one. Improving connectivity is key to increasing our productivity, attracting inward investment and retaining local talent. A third river crossing in Great Yarmouth would support all three; helping to create thousands of new jobs, opening up our all-energy coastline and reducing congestion which costs our local business time, money and customers.”

Cllr Graham Plant, the leader of Great Yarmouth Borough Council, said: “The benefits of the Third River Crossing for the borough and region are huge, and the borough council is absolutely committed to working with partners across the public and private sectors to make a compelling case to Government for the funding required to make this important piece of infrastructure a reality.” 

Martin Wilby, Chairman of Norfolk County Council’s Environment, Development and Transport Committee, said: “The third river crossing is vital to Great Yarmouth’s future prosperity. The town has enormous potential for economic growth, with its burgeoning status as a hub for the offshore renewable energy industry as well as hosting two government-designated Enterprise Zone areas.” 

Norfolk County Council’s proposal for a third river crossing would see a lifting bridge constructed linking the newly-renumbered A47 (formerly A12) at the Harfreys roundabout in the Southtown area of Yarmouth to the port and the Enterprise Zones on the other side of the river. The new bridge would help to reduce traffic build-up on the town’s roads, particularly on its existing Haven and Breydon bridges over the River Yare which often become congested during ‘rush hour’ times and peak tourist seasons.

It is estimated that £120 million would need to be spent between now and the project’s completion to design and construct the bridge, with Norfolk County Council seeking 80% of these costs from the Department for Transport and 20% to come from a local contribution. This could come from a variety of sources, possibly including, but not limited to, the New Anglia Local Enterprise Partnership, local authorities and the private sector.

The third river crossing is part of a wider plan to transform the Great Yarmouth area over the coming years to make it easier for people to get to and around and make it a more attractive place to live, work and visit. This will help attract future investment and development to the area, creating skilled jobs, business opportunities and giving local people a better quality of life.

A leading Parliamentary Committee has sought to shed light on the potential impact of four different scenarios on the UK’s post-Brexit international trade relationships.

Published by the House of Commons International Trade Committee, a new report considers not only the implications of each model for the UK’s future trading relationships, but also the relevant issues that the Government will need to resolve.

The scenarios considered are: the UK’s relationship with the World Trade Organization (WTO); the Free Trade Agreement (FTA) that the Government intends to strike with the EU; the implications of the UK falling back on trading with the EU under WTO rules alone and the UK’s future trading relationship with non-EU countries.

Perhaps surprisingly, the Committee recommends that the Government should evaluate the implications of the UK’s rejoining the European Free Trade Association (EFTA).

Doing so would, MPs argue, offer an opportunity for a smoother transition as the UK leaves the EU.

The prospect of UK membership of EFTA from 2019 onwards could be to Britain’s advantage the report suggests, calling on the Secretary of State to publish a White Paper on EFTA membership before summer 2017, so that negotiations can commence before the end of the year.

“The Government is about to embark on a process that will transform our trading relationships in Europe and across the globe,” Committee Chairman Angus MacNeil said.

He added that the Government must not only set out its vision for UK trade after Brexit, but also provide reassurance that contingency plans will be in place in case an agreement with the EU is not reached.

MPs also want clarification about the extent to which the UK can start negotiating new FTAs before it leaves the EU. The report UK Trade Options Beyond 2019 can be found here.

Few MPs go as far as the one who recently said that trade talks between the UK and the EU could be completed in an afternoon, but there is clearly a belief in some parts of the British Parliament that such negotiations should take months rather than years.

Unfortunately, any examination of how actual trade deals have been completed in recent years would seem to suggest that the latter is almost exclusively the case.

The latest example concerns the ongoing attempt by the European Commission to set-up talks with the Association of Southeast Asian Nations (ASEAN).

Negotiations originally started 10 years ago, in 2007, but difficulties with dealing with a body comprising 10 nations at very different stages in their development led the Commission to concentrate its attention on bilateral deals with the more willing ASEAN members.

So far it has concluded, but not yet ratified, bilateral trade agreements with Singapore and Vietnam, and is pursuing negotiations with Indonesia, the Philippines and also, as regards investment protection, with Myanmar.

At a recent meeting, however, trade leaders from the EU and ASEAN agreed to look at resuming free trade talks between the two regions.

Trade Commissioner Cecilia Malmström said: “There is still much to be done to unlock the full potential of the EU-ASEAN relationship, and the quickly changing international environment now makes us turn our eyes even more towards Asia. I am glad to see that both sides are now ready to seize the momentum and start preparations towards re-launching these negotiations.”

It could be next year before anything substantive emerges, however, these things take time.

On Tuesday 14th March, Norfolk Chamber helped coordinate the Your Future Career’s event at Attleborough Academy. Over 250 student attended the event, where they each had the opportunity to engage with local businesses, prompting them to learn more about the types of careers available. This event is part of an initiative supported by the Norfolk Chamber to bridge the gap between young people and businesses and inspiring them to think about their futures.

Over 250 students from years 9 and 10 came along to learn more about the career development opportunities within the 30+ companies who attended the event including MCP Solicitors, Lovewell Blake and the Army as well as further education options at the UEA, Lincoln University and Norwich City College.

As well as the exhibition, with students milling around the sports hall and engaging with businesses at their stands, there were also four workshops running in nearby classrooms. Easton & Otley College ran a workshop which depicted what studying at a land based college is like, the types of courses they offer and the careers these could lead to. They were keen to impress upon the students that studying agriculture was more than just mud!

Another workshop was ran by The Masons Trust who educated the students on their new social media style careers related website ‘I can be a…’. The site allows the students to find out more information about the job/apprenticeship opportunities out there, take a quiz which pinpoints careers that be suited to them based on their hobbies/interests and find out more information about sectors they are interested in.

Other workshops included UEA who delivered a session about the 37,000 degree options available (a figure which shocked the students!) and Independence Matters, a local care provider who help people with a variety of health and mental health needs.

Overall the event was a huge success which highlighted the student’s enthusiasm about learning more about their local business community and willingness to consider their futures. The businesses also enjoyed the interaction with the workforce of the future and the platform the event provided to educate the students about the work they do.

If you are interested in representing your business and enthusing young people about a career in your sector, please click here to register your interest.

We have the following careers events coming up:

STEMM Careers event at Flegg High School – Wednesday 22 March 2017, 08:30 – 13:30

Thetford Academy Careers Event – Thursday, 11 May, 2017, 12:30 – 15:45

Wymondham High Careers Event – Monday, 3 July, 2017, 09:30 – 13:30

Norwich Airport hosted the recent Norwich Chamber Council meeting and took the opportunity to outline some of their plans for the future.

Richard Pace, Managing Director for Norwich Airport noted some of the key areas of success from the past year: the airport had catered for 524,000 passengers; 40,000 aircraft movements; had 25 direct flight destinations; and provided approximately 1,000 people with employment on site – 260 being directly employed by Norwich Airport.

Mr Pace gave an overview of their 30 year Masterplan, which is currently being drafted.  This will include: upgrades to airport infrastructure; increases in passenger growth; and more holiday destinations; as well as their aspirations to take advantage of the completion of the NDR.  There will be an opportunity to review the Norwich Airport Masterplan when it goes out for consultation later in the year.

The Norwich Chamber Council meeting was chaired by the newly appointed Chair, Paul McCarthy, General Manager of Intu Chapelfield.  

Commenting on today’s interest rate decision by the Bank of England’s Monetary Policy Committee, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“While the Bank of England’s decision to keep interest rates on hold was widely expected, there was a surprising shift in the committee’s voting pattern, with one member voting for a rate rise.  This partly reflects the fact that the Monetary Policy Committee are facing a more challenging period, with inflation likely to move materially above the 2% target in the coming months. Furthermore, if US monetary policy continues to tighten as expected, it may weigh on UK rate decisions by increasing the downward pressure on Sterling, pushing UK price growth higher.

“However, with UK economic conditions likely to become more subdued over the near term, and little evidence that higher inflation is becoming entrenched in stronger pay growth, the MPC has sufficient leeway to tolerate a prolonged period of above target inflation. Therefore, while the next move in interest rates is likely to be upwards, we don’t expect this to happen until the end of 2018.

“With the MPC close to exhausting the monetary policy tools available to them, the government must do more to support business confidence and incentivise investment, particularly by tackling the rising input costs faced by businesses.”

As the second largest economy in Latin America, but a higher GDP per capita than any of the BRIC countries, Mexico offers an abundance of possibilities, in many different sectors. The main language is Spanish, but English is widely used and understood. Mexico consists of a huge mix of cultures, with influences from Europe, the United States, combined with the old, rich cultural history dating back to the Aztecs and Mayans. While Mexico has a beautiful culture, nature and traditions, it also boasts powerful, global cities with different sector hubs. Currently, Mexico is the world’s 15th largest economy, though it is predicted that in a few years, it will be in the top 10.

Trade with Mexico

Mexico is the country with the most free trade agreements (FTA) in the world. Besides the FTA Mexico has with the European Union, they have 12 FTA’s with over 40 countries. In the uncertainty following the results of both the Brexit vote and the U.S. election, the Mexican and British governments have both been keen to stress that establishing a new Free Trade Agreement between the two nations is a top priority.

Opportunities in Mexico

With a population of over 120 million and a growing middle class, there is a huge market for British goods, about the same size as the whole of Western Europe.

Though mostly every sector offers great opportunities, these are the ones which are currently the most prosperous:

Oil and Gas

Mexico is a major oil exporter, though a great deal of their potential has not been realised due to the 75-year monopoly the state has had on oil and gas. The current energy reforms, where not only the market for oil and gas – but also for electricity – have been opened up to new players, already increasing oil production. As more private companies win bids for exploration and production, opportunities open up for suppliers into the sector.

Renewable Energy

Besides oil and gas, there has been an increasing interest in renewable energy in Mexico.

• The potential for wind energy is estimated at around 40 GW.
• The potential for hydroelectrical energy is estimated at 53,000 MW.
• Because of its ideal geographical location in the so-called ‘Sunbelt’, Mexico is seen as one of the most attractive countries for the development of photovoltaic projects, with a potential to generate 6,500,000 GW per year.
• Mexico has committed to source 35% of power from clean sources by 2024

Manufacturing

The 1994 establishment of NAFTA opened Mexico up to an influx of American culture and goods as well as propelling Mexico’s manufacturing sector. Currently, more than a quarter of Mexico’s trade with the UK consists of manufactured goods. Unlike other countries in Latin America, Mexico’s manufacturing sector has had solid growth over the past years. This is not only due to NAFTA, but also because of low average labour costs, a skilled and youthful workforce and various fiscal incentives. The main subsectors within manufacturing are the automotive industry (Mexico is the leading exporter in Latin America, and 8th in the world), the aerospace industry and white goods.

Other opportunities

However, there are many more interesting, steadily growing sectors in Mexico:

• They are the leading exporter of electronics in Latin America, with an average growth rate of nearly 7%.
• The food sector contributes heavily to current trade with the UK, and Mexico has a strong position worldwide in multiple food subsectors, including coffee, cacao powder, avocadoes and meat.
• The Mexican government has an ambitious national infrastructure plan with opportunities for private companies in large construction projects.
• Also metalworking, mining, tourism, Information Technologies, education and the pharmaceutical industry are sectors with a plethora of opportunities.

For more information about Mexico and more specifically the relationship between UK and Mexico, please visit our website: www.britishbusiness.mx. Also, if you require more information or advice about entering the Mexican market, please do not hesitate to contact [email protected] or the Norfolk Chamber International Team.

Key Dates:

British Chamber Education Day in Mexico: 26th May 2017

Mexican Petroleum Congress: 7th – 10th June 2017

British Chamber Energy Day: 3rd October 2017