Chamber News

• Energy bills remain a top business concern, as many face a drastic reduction in their support
• Energy market for businesses must be reformed to protect firms and correct market failures
• Firms are facing a further financial squeeze, with corporation tax, living wage and business rates all changing from April 1st

As businesses face an 85% decrease in energy support from tomorrow, the British Chambers of Commerce (BCC) has highlighted the need for an energy support contingency plan, and is calling for increased, targeted help for firms who desperately need it. The Chambers are also calling on Government to increase Ofgem’s power to strengthen protection for businesses in the energy market. Nova Fairbank, Chief Executive at the Norfolk Chambers of Commerce, said: “We have been signalling for months that many Norfolk businesses will struggle to afford their energy bills when financial assistance reduces by 85%, with many receiving a fraction of their original support. Almost half (47%) of firms say paying bills will be difficult from tomorrow onwards. “But of the seven energy policies we advocated for the Government to include in this month’s Spring Budget, not one was acted upon. “Flexibility to increase support for those who desperately need it – ignored. Easing the burden of claiming VAT on energy – ignored. Funding for improved business energy efficiency – ignored. And so the list goes on. “Government also failed to heed our calls to increase regulation of the business energy sector. The energy crisis faced by firms and households are two sides of the same coin. Yet, non-domestic customers do not enjoy the same protection as households. “To ensure competition in the business energy sector, and solve market failures, Government must ensure Ofgem has the necessary powers to properly regulate the industry. We are also asking Ofgem and Government to introduce a ‘duty to supply’ mechanism to the non-domestic energy market, to ensure businesses can access fixed rates, providing them with certainty and stability. “Along with the reduction in energy support, businesses are facing several other changes in the business environment from tomorrow. Corporation tax is increasing, as is the national living wage, while a number of firms will see their business rates change due to revaluations. “These changes will have a significant impact, but Government is yet to offer any meaningful support to offset the challenges currently facing so many UK businesses.”

Reacting to the Government’s announcements on its updated climate and energy strategies, Nova Fairbank, Chief Executive at The Norfolk Chambers of Commerce, said: “The government has grasped the scale of the climate challenge with a wide-ranging plan to boost green energy production. “Policies the Chamber Network have campaigned for have been brought into play; amending planning rules to make it easier to develop renewable energy; boosting British nuclear power; upgrading our electricity grid; unlocking private investment for Net Zero and a £10 billion boost for Export Finance to support the UK’s burgeoning green export trade. “But there is a gap around business energy use. To meet the UK’s ambitious 15% energy efficiency target, Norfolk firms will need to install vital measures such as insulation, energy management systems and renewables. “Many smaller firms will struggle with the capital costs, so support should be provided where necessary, as has been pledged for households. “There also appears to be a mismatch between good ideas, such as UK-wide insulation, heat pumps and electric vehicle charging points, and the availability of a skilled workforce to make them happen. “Alongside the investment in infrastructure and manufacturing must come further investment and policy changes in training to make these plans a reality. “Allowing apprenticeship levy funds to be used for all forms of accredited workplace training would be a simple step to help deliver the green jobs needed for Net Zero. “The Government has taken a big step forward with these announcements, but it now needs to plug the gaps in its strategy to ensure it does not lose momentum in the years ahead.” More detail on the Government’s plans can be found here. Get your business involved with our Business Climate Leaders programme  Net Zero grants, funding and support  

• Unreliable public transport letting down almost three in five (58%) rural SMEs

• Almost two in three (64%) SMEs believe they don’t have access to sufficient skilled labour in their local area

• More than one in four (27%) SMEs expect their turnover to decrease over the next year, while less than a third (30%) plan to increase investment in technology and R&D

Factors such as the availability of quality public infrastructure and access to skilled labour are entrenching a rural-urban divide among UK SMEs. This is according to a new survey of more than 900 SMEs by the British Chambers of Commerce (BCC) and Xero, the global small business platform. The survey, exploring the suitability of SMEs’ local trading environments, found that those based in rural areas were more likely to report a deficit in key success attributes. General business outlook Across the country, the SME business outlook is subdued. Only half (53%) expect to see turnover growth in the next 12 months, while one in four (27%) expect turnover to shrink over the same period. Equally, less than a third (30%) of SMEs plan to increase investment in technology, research, and development, while 18% expect a decrease. Public transport When assessing the suitability of local infrastructure, the rural-urban divide was particularly notable in public transport. Well over half (58%) of SMEs in rural areas do not believe their area has reliable and well-connected trains, compared with just 39% in urban areas. Rail network deficiencies are also impacting SMEs based in business, retail or industrial parks, half (51%) of which were not satisfied with this provision. This rose further still when it came to buses and trams – over three-quarters (79%) in rural or countryside areas do not think they have access to reliable buses and trams, compared to 42% in towns, villages and high streets. There is also a regional disparity evident; SMEs in the North of England (52%) and the Midlands (51%) disagreed that they had access to reliable and well-connected trains, compared with only 36% of SMEs in the South. Internet connectivity The rural-urban divide is also evident when it comes to connectivity. While three-quarters (75%) of SMEs overall agree their area has reliable broadband, this rises to 82% in urban areas and falls to around half (56%) in rural areas. Labour market Firms report a high level of dissatisfaction with their local labour markets; almost two in three (64%) SMEs do not believe their local area has high availability of appropriately skilled labour. However, there is divergence on this issue based on the type of business area. Firms in business, industrial or retail parks appear to struggle most acutely with this issue, with almost three in four (72%) stating that they did not have access to appropriately skilled labour. While still concerning, this drops to 56% for firms based in urban areas. Alex Veitch, Director of Policy & Public Affairs at the BCC said: “Our research highlights the rural-urban divide that continues to exist between firms across the UK, with rural businesses generally reporting higher levels of dissatisfaction with the quality and availability of local resources. “High-quality public infrastructure and access to a skilled labour force are both key to the success of a business, in particular SMEs, and today’s findings indicate that rural businesses are at a significant disadvantage. “Government must urgently prioritise the development of public infrastructure. Such investment will not only enable local and small businesses to adapt and thrive, it will also create jobs and inject money into local economies across the UK.” Jo Copestake, Director of Small Business at Xero, said: “When small businesses are eventually able to pivot to growth mode, any recovery would be inequitable, as many rural small businesses don’t believe they have the same trading conditions as their urban counterparts. We can’t risk that the conditions for recovery are skewed in favour of businesses in certain locations, which would reinforce the divides that have hampered the nation’s full economic potential for so long. “Small businesses are the backbone of our economy, and that means their roots are all around the country. We must create an equitable trading environment, where each and every business can access the digital know-how, connectivity and infrastructure required to build a healthy business.”

Responding to news of the ratification of the Windsor Framework, William Bain, Head of Trade Policy at the British Chambers of Commerce, said:   “The joint EU and UK decision to give formal effect to the Windsor Agreement is another important step in improving trading conditions between Great Britain and Northern Ireland.   “For the BCC, the priority is now making sure the new customs and paperwork arrangements, plus the trusted trader schemes, work smoothly for businesses either side of the Irish Sea.   “We look forward to close engagement with HMRC over the coming months to make sure the on-the-ground reality of this deal produces tangible benefits for firms.”

This week, some of the Chambers team, members and non-members visited Solinatra for a tour of their Research and Development Centre and a chance to network. The event began at Solinatra at 10am with tea and coffee and a welcome from CCO, Simon Girdlestone and Communications Officer, Georgie Oatley, followed by a factory tour of their Research and Development Centre based in Horsham St Faith. We discovered how Solinatra is producing a truly sustainable alternative to single-use plastic products and packaging. The passion and knowledge of Simon and his team were insightful and engaging. They showed us first-hand the processes behind Solinatra and how their product has all the benefits and none of the drawbacks of plastics. Consumers have been demanding sustainable alternatives to plastic. Socially conscious organisations are crying out for a product that will meet that demand. Governments, under pressure from campaigners, are introducing regulations that place limitations on single-use plastics and make them a less viable option. Solinatra is in the vanguard of companies that are leading the transition to the use of sustainable plastic alternatives. Solinatra is an industry-leading product, and they are going to use it to change the world for the better. Solinatra | Their Vision To revolutionise the world with truly sustainable alternatives to single-use plastic. To pioneer the creation of and use of truly biodegradable, advanced biomaterials. Caroline Ellis, Account Manager at Norfolk Chambers said “it was truly fascinating to hear all about how Solinatra and team are trying to make impactable changes for the future. They have just launched the development of the first naturally biodegradable plastic for thermoforming applications, in a project co-funded by the UK’s innovation agency, Innovate UK. The fact that this is on our doorstep here in Norfolk is incredible”. A big thanks to the Solinatra team for the event.

Responding to the latest Bank of England interest rate decision, Nova Fairbank, Chief Executive at the Norfolk Chambers of Commerce said:

“Today’s decision to increase the interest rate indicates the Bank are still pursuing strong action following yesterday’s surprise rise in inflation. Record high inflation remains the top issue of concern for Norfolk SMEs, and it has been wiping out their ability to invest and grow for almost two years now. 

“However, an interest rate rise alone is a blunt instrument that doesn’t address some of the fundamental causes of inflation such as failure in the energy market and global supply chain shocks.  

“The cost-of-living crisis and the cost of doing business crisis are two sides of the same coin and SMEs, like consumers, are getting hit from both rising prices and rising borrowing costs. The only way out of this vicious cycle is through taking action to boost economic growth, through investment in infrastructure, skills, and global trade.” 

Reacting to the publication of the 2023 Integrated Review, William Bain, Head of Trade Policy at the BCC, said: “The renewed commitments to tackling climate change, sustainable development, and economic empowerment of women are all welcome in the Review. “On Europe, the Refresh takes account of the impact of the War in Ukraine, for both the economy and supply chain security. UK businesses stand ready to assist in the reconstruction of Ukraine with investment, and offers of technical and business expertise. “It also heartening to see improvements in the UK’s Brexit deal with the EU being identified as a priority. The prospect of improved relations with the EU could help to maximise potential of the Trade and Co-operation Agreement for the UK. “On Indo-Pacific relations, the Review points to trade as one of the key focuses. With the UK in the final stages of CPTPP accession, there is hope among UK firms that this could deliver new export and investment opportunities. “But we know without supply chain security this will be more difficult – the UK urgently needs to secure reliable sources of semi-conductors, related raw materials and other components for manufacturing. “For that reason, we look forward to engaging with Government on the forthcoming UK Supply Chains and Import Strategy, and the Critical Minerals Resilience Task and Finish group. “On science, Artificial Intelligence and technology, the ambition of the Review is sound, and needs to be supported by the right growth and export finance strategies for the UK to make the most of its strengths in these areas. “The four pillars of the Review include building resilience and shaping the international environment. We believe that pro-growth trade and investment policies will be critical to achieving this, while also generating prosperity across the UK.”

Norfolk Chamber members Chantry Place have been working towards improving the sustainability of the centre. Although built with it in mind, they have been working hard to have sustainability at the heart of their operational practices, culture and values. Their goals include:

• Actively monitoring and reducing waste
• Considering sustainability in everything we do
• Engaging our 1,244 employees with our values
• Supporting local businesses, charities and our local community
• Being inclusive
• Supporting our team with mental and physical wellbeing
• Always reviewing, learning and understanding how we can do better
• Promoting environmental travel
• Energy monitoring programme

Read the full article on their website.

Giving her full reaction to today’s spring budget, Shevaun Haviland, Director General of the British Chambers of Commerce, said: 

“The Chancellor has acted to address the unfilled jobs blighting our economy. It is especially good to see the help on childcare and for over 50s workers.  

“The plans for full capital expensing are also a step in a right direction to offset the rise in corporation tax. But as the OBR highlight a high level of uncertainty, the jury is out on how much it will help compared to the Super Deduction scheme. 

“The most recent BCC survey on investment found that only a fifth of firms were increasing investment and a similar number were reducing it. This budget looks unlikely to change that dynamic. 

“This is especially true for almost half of businesses who told us they will struggle to pay their energy bills from April. 

“They cannot invest when they are fighting to survive. Beyond the £63m of additional support targeted for leisure centres, there is little that will provide comfort to these firms.  

“The Government also failed to reform business rates which we have repeatedly called for. If the UK’s innovative growth industries are to remain competitive on the world stage, then Government must shift the dial further on investment, both within the UK and from overseas.” 

Alex Veitch, Director of Policy at the BCC, said: 

Skills shortages 

“It is encouraging to see the Migration Advisory Committee’s recommendations on adding five new construction jobs to the Shortage Occupation List have been accepted. More frequent reviews of the system are also good news, but the lack of skilled labour is having a corrosive effect on our economy. This shift to a new system cannot come fast enough and other sectors facing huge recruitment pressures, such as hospitality, must be given help.” 

Business Rates 

“We are disappointed to see that the Government failed to undertake further reform of the business rates system, which places a significant burden on firms.  

“We need to see a move to annual revaluations, and a more ambitious approach that incentivises rather than disincentivises growth and green investment in the long term.” 

Energy Support 

“Once again Government has failed to understand that the energy crisis for businesses and households are two sides of the same coin. Extending the Energy Bills Relief Scheme for households is hugely welcomed, but with reduced support for businesses planned form April, and no sign of further support, many will be reliving the anxiety they were facing a few months back. 

“We included seven energy recommendations in our budget submission, but not one of these has been acted upon today.” 

Trade 

William Bain, Head of Trade Policy at the BCC, said:  

“Trade was not mentioned once by the Chancellor, yet again he has neglected the significance of exports – which are a big driver of economic growth. While the later announcement on easing some customs procedures is welcome, it doesn’t address the fundamental challenges facing our exporters. 

“The OBR forecasts predict a drop of 6.6% in export volumes in 2023 followed by a further drop of 0.3% in 2024. This would mean two years of lost growth for UK goods and services exports.  

“The UK Government must urgently look to improve our trading conditions with the EU and move heaven and earth to increase take up of preferences in new and existing trade agreements, which many small businesses remain largely unaware of.”  

Businesses and suppliers in Norfolk and the East of England could be part of the programme to restore and renew the historic Palace of Westminster. A group of 15 leading businesses and representatives from across the region attended a supplier event at King’s Lynn Town Hall last week (09 March) to meet the team delivering Parliament’s Restoration and Renewal Programme and discuss how the complex work can support jobs and opportunities across the region. There are already dozens of companies involved in the restoration effort. Small to medium sized businesses across the country are already benefitting from the work. Last year, seven contracts worth £4m for Palace of Westminster building investigations were awarded to suppliers nationwide with five out of seven contract winners being classed as a small or medium enterprise (SME). Leading local experts in everything from heritage to finance, construction and further education attended the event to share their skills and experience, and to hear from the team at the Houses of Parliament Restoration and Renewal Programme about the approach to getting local businesses involved in the major project to restore the Palace of Westminster. Andy Haynes, Commercial Director at the Houses of Parliament Restoration and Renewal Delivery Authority, said: “We’re travelling around the country to make sure that small businesses across the nation are aware of future opportunities from the works to restore and renew the Houses of Parliament. “I was absolutely delighted to be in King’s Lynn, meeting  a number of small and medium-sized Norfolk businesses and organisations as well as seeing the historic town’s tremendous heritage and the way its buildings have been carefully restored and renovated over the years.” Nova Fairbank, Chief Executive of Norfolk Chambers of Commerce said: “It was great to see so many local businesses engaged and understanding the opportunity that such a nationally significant project can bring. We enjoyed showcasing the fabulous heritage in West Norfolk and how quality restoration has made a difference in the beautiful town of King’s Lynn. We’re delighted to be supporting this project with the event and we’re looking forward to seeing Norfolk businesses help to bridge the skills gap and restore some of our iconic historic buildings”. Both Houses of Parliament are committed to preserving the Palace for future generations. The Palace is enormous and complex – the size of 16 football pitches, with the whole building sharing the same water, electric, sewage and gas system. Many of these services are 50+ years old and have reached the end of their lifespan. Hundreds of miles of pipes and cables need replacing. The scale of the challenge means more extensive restoration and renewal is needed as part of the overall plan for the Parliamentary buildings. Currently there are dozens of major projects underway to repair and restore key parliamentary buildings by parliamentary teams with which the Restoration and Renewal programme will work closely to learn from and build the lessons into the overall restoration plans for the Palace. In July 2022 Members of both Houses agreed there needs to be a more aligned and integrated approach to future restoration, prioritising safety critical work before the formal go-ahead and options for the overall restoration are confirmed. In November 2022, news of the possible discovery of the medieval Thames River wall underneath the Houses of Parliament was revealed by the extensive programme of building investigations by restoration teams last year. Specialists spent 4850 hours examining 160 rooms and drilling boreholes up to 70 metres deep to assess ground conditions around the Palace of Westminster. The surveys are helping restoration teams develop the most detailed ever record of the Palace of Westminster to inform decisions about essential restoration work. These surveys will inform a set of options, being developed by the Restoration and Renewal Delivery Authority, for how significant elements of the restoration work will be delivered and the level of ambition for restoration work. This will include variations on the time and extent to which Members and staff are asked to move out of the Palace to allow complex construction work to take place. The volume and future scope of the main restoration works are not yet certain until approval is given by Members of both Houses to costed proposals, in advance of this Members will be asked to vote on a strategic case by the end of 2023.  

According to projections, by 2030, 20% or less of the population will be grossly underqualified for their positions. Consequently, many people may find themselves working less productively, feeling less satisfied with their jobs, not gaining access to the right training, or even losing their jobs entirely. The skills gap is widening at different paces within each industry and caused by various factors that impact them, such as a lack of investments from the government or employers, Brexit & pandemic situations or by fear of digital automations that “kill” off sustainable positions in the workplace. Some of major highlights for skills challenges are:

• Career growth and staff supply are limited,
• Pay difference within sectors,
• Lack of engagement with colleges/uni,
• Apprenticeship programmes not appealing,
• Rural areas hard to retain and recruit,
• Not enough local trainings in rural areas leading to talents to relocate,
• Qualifications aren’t always the key to success,
• Work experience is meaningful and needs more buy in from employers,
• Lots of groups around doing the “same thing” creating confusion amongst training & skills.

In this article, we are looking at the main sectors facing skills gap challenges and how these could be answered for a more stable future to the young talents entering the workforce. Manufacturing & Engineering According to a survey mentioned by themanufacturing.com in April 2022, the main reasons why manufacturing industries are experiencing skills shortages are insufficient involvement of manufacturing in technical education; lack of opportunities in modern manufacturing and engineering; and a poor interest in manufacturing and engineering. It also shows that the majority of young people are less interested in the manufacturing industry as part of their career path or growth. There are concerns about automation where robots are the sustainable solution for many companies, replacing staff as technology progresses. Which makes young workers wonder about the long-term commitment to this line of work. In the engineering industry, young workers may struggle to find the right training. This is because of technological advancements becoming more and more regulated within businesses (e.g. ISO 9000). Manufacturing and engineering industries are not dying industries but only struggling in finding the right skills. What could be beneficial to businesses, is having the right training provided as well as learning from employees that already have the right skillsets. Finance & Business According to FinTechFutures.com, the main reported soft skill gaps in the finance industry are digital and technology skills. In the world of automation in the goal to remove repetitive tasks, the future of accountancy might well become fully AI-controlled. Many experienced accountants report that tasks are now automated and controlled by emerging softwares, becoming more and more challenging to catch up with digital skills. Although the goal of AI is to give more brain space to focus on fulfilling tasks a human can work on, many young skilled individuals find it challenging to keep up with the new technology & demand from the companies. Or a fear of being replaced by an AI-robot altogether. New sustainable trainings would make the young generation more certain and prepare for the future of digital skills & demands in the finance industry. Construction Although similar to the challenges Manufacturing & Engineering face, the construction industry finds it difficult to source skills. Projects at scales are facing a demand influx since a few years, now facing skills shortage. It is becoming difficult to attract talents and meet the inflated salaries for long-term projects. The construction industry is also facing a unique challenge when it comes to finding the right demographic to fill in positions. It is admitted that a certain type of demographic (middle-aged men) will be preferred for the positions which restricts the pool of choice to the employer. If the demographic gap was closed and would consider different demographic in the industry (e.g. women), it could solve a large chunk of the skills shortage on the market. Transporation & Logistics Since Brexit, UK faced a significant skills shortage when EU-workers returned to their home countries. There have been campaigns set by the government to fight against this crisis, but skills shortage remains an issue to this day. Additional to the Brexit issue, the Calais Crisis and other political challenges are amongst factors why it’s proven difficult to retain skilled drivers in the industry. There is big battle of image and standard that this industry needs to fight for. Attracting young workers into this career path should starts with directing to the right training & access the industry for all demographics. Although private industries can offer larger salaries and retain their talents in this way, it is proven more difficult for the public sector. Energy Sector inc offshore wind With the UK government target of becoming Net Zero by 2050, it is estimated that 200,000 workers will need training to fill in the skills shortage in order to meet the target. Skills from oil & gas can be transferrable, making it easier for some companies to make the switch, but as projects are booming, the skills gap is felt for many companies. It would be ideal for the government to work with school programs to educate the young generation at early stage, but companies will have to provide a long-term job security to retain young talents. Retail, Hospitality & Tourism Similar to transportation & logistics challenge, hospitality is facing a shortage of EU workers since Brexit. EU-workers in the UK accounted for more than 42% in the hospitality sector and has come down to 28% since, creating the skills gap we are now facing. However, it is not news that this sector is facing highest turnover of staff, positioning this sector as the least appealing for long-term career choice. Many young people look at hospitality as an entry-level to their careers, deemed as low skilled jobs with the lowest salaries on the market with little possibility of growth. There are no dedicated education towards hospitality, making it difficult for employers to find the right talents and retaining them. It has been pointed out that the government should relax requirements for immigrants to work in this sector, making it easy on external talents to enter the job market and close the skills gap where possible. Communication is also the main skills gap challenge employers find. Recruits might not have the knowledge about how to handle a customer-centric situation or fail to adopt a business etiquette. Because there are no regulated trainings towards communication for hospitality, it is hard to find the right talents that will represent the company to their customers. Health care According to the UK Commissions for Employment and Skills (UKCES), “the UK population is growing and ageing which is likely to lead to a 20% increase in demand for residential care, home care, day centres and meals for decades to come. However, the health and social care sectors have relatively low rates of innovation and investment compared to other sectors.” [PDF download] Since the pandemic and the rise in scandals with pay freeze and low investment in the sector, young talents are not looking at the health sector as a safe environment to grow their career in. With the right trainings & investments, there are ways to retain talents and upskill existing workers. The improvement of communication skills generates an obvious shift in how staff members interact toward patients.  Staff members exhibit greater empathy, greater sensitivity to patient cues, and superior questioning techniques. Evidence suggests that long-term change is maintained. In Conclusion Skills & talent shortages are widening in most industries, with the majority struggling with communication & digital soft skills. In recent years, the Brexit & the pandemic have been the main culprits for these shortages, leaving the UK with less individuals available on the market. Some sectors also struggle with skills awareness and lack of available specialised trainings to fill in most demanding positions. With the right investments from the government and the right institutions in place, there are ways to help the young generation in embracing the innovation in the working place and retaining them. Is there something that we’ve missed? Is your company seeing different challenges we haven’t mentioned here? Feel free to raise your voice and become part of the skills gap solutions in East Anglia by filing in this employer form: https://form.jotform.com/223474490001043  

Giving her initial reaction to today’s Spring Budget, Shevaun Haviland, Director General of the British Chambers of Commerce, said: “The Chancellor has acted to address the unfilled jobs blighting our economy. It is especially good to see the help on childcare and for over 50s workers. The plans for full capital expensing are also a step in a right direction to offset the rise in corporation tax, but the jury is out on how much it will help businesses compared to the Super Deduction scheme. “Almost half of businesses have told us they will struggle to pay their energy bills from April, and they cannot invest when they are fighting to survive. There is little in today’s announcement that will provide comfort to these firms. “The Government also failed to reform business rates which we have repeatedly called for. If the UK’s innovative growth industries are to remain competitive on the world stage, then Government must shift the dial further on investment, both within the UK and from overseas.”