Chamber News

Norfolk Chambers of Commerce is working closely with Hitachi Energy to bring a Meet the Buyer event for the Hornsea 3 on 25^th April at Norwich City Football Club. This event is a key chance for local SMEs in specific sectors, to meet and discuss the opportunities to work on the Hornsea 3 Offshore Wind. This project will provide huge value for local businesses and will enable opportunities for collaboration within the supply chain. Hitachi Energy has been appointed by Ørsted, the world’s most sustainable energy company, to deliver the Hornsea 3 offshore wind farm. With a capacity of 2,852 MW, Hornsea 3 will produce enough low-cost, clean, renewable electricity to power around 3.2 million UK homes, making a significant contribution to the UK Government’s ambition of having 50 GW offshore wind in operation by 2030 as part of the British Energy Security Strategy. The project (subject to Ørsted taking a Final Investment Decision on Hornsea 3) will see the installation of 240 km of onshore cables that will connect the offshore wind farm from the landfall at Weybourne in Norfolk to the Norwich Main National Grid Substation. Works are scheduled to commence in March 2023 with an anticipated completion in 2027. Both Hitachi Energy and Ørsted are committed to engaging with the local community and supply chain to maximise the benefits and opportunities for individuals and the local economy. Hitachi Energy has proactively identified a number of the relevant trades, services, commodities, and skills required and is working closely with Norfolk Chambers to co-ordinate and facilitate as many opportunities as possible for local, and particularly, for small businesses and individuals to get involved and benefit from this exciting project. Hitachi Energy is advancing the world’s energy system to be more sustainable, flexible, and secure. As the pioneering technology leader, we collaborate with customers and partners to enable a sustainable energy future – for today’s generations and those to come. Norfolk Chambers of Commerce, Chief Executive, Nova Fairbank said “Following previous successful Meet the Buyer events, we’re delighted to be bringing back another event. Our mission is to connect the Norfolk community and what better way than bringing Norfolk businesses together on such a significant project”. If you’re interested in attending the event to showcase your services, please click here.

Reacting to news of an agreement on the UK’s accession to the CPTPP, William Bain, Head of Trade Policy at the BCC, said: “The addition of the UK to this trading bloc takes it to 12 countries which account for 15% of global economic output. “It will open up new opportunities for our businesses in both inward and external investment with the other 11 countries. “The UK has bilateral trading terms negotiated with nine of the eleven current members, but no agreements had previously been reached with Malaysia and Brunei, so they will be of particular interest. “There are not many multi-national trade agreements like this one, so it is an interesting new prospect. “We see particular relevance for small and medium sized businesses in reduced costs to import components from member countries to use in manufactured goods for export through the rules of origin in the agreement. “There are also generous terms for data flows which underpin an increasing part of international trade.   “We will be scrutinising the deal in detail, but at first glance this looks to be good news for UK businesses to enter or upscale their trade in these markets, with increased confidence and more generous trading terms. “We look forward to speedy ratification and then working with the UK Government, and others, to ensure firms get the best possible access to this thriving market within the global trade system.”  More information on the CPTPP can be found here.

• Over half (52%) of UK firms believe their business turnover will increase over the next 12 months, up from 44% in Q3 2022.
• However, only one in three (34%) firms experienced an increase in sales over the past three months.
• Almost half (47%) of hospitality businesses reported a drop in cashflow in the last quarter.

The BCC’s Quarterly Economic Survey (QES) for Q1 2023 shows that while business confidence has improved from a very weak base, most firms see no improvement to business conditions. The survey of over 5,200 firms – 92% of whom are SMEs – reveals a sectoral division in business performance, with hospitality and retail firms consistently more likely to report worsening cash flow, investment, and turnover than other sectors. The research took place between February 13 and March 9, before the Chancellor’s Spring Budget was announced. Growth in business activity remains weak, with retail and hospitality sectors facing most significant challenges. The percentage of firms reporting increased domestic sales has not seen any bounce back since it fell significantly in Q3 2022. Only one in three (34%) firms experienced an increase in sales over the past three months, while 24% reported a decrease and 41% reported no change.  The retail and hospitality sectors remain particularly weak. Almost two in five (38%) retail firms experienced a decrease in sales over the past three months, with one in three (32%) hospitality businesses reporting a fall. More businesses continue to report a decrease, rather than an increase, in cash flow, highlighting the precarious state many SMEs are still in. Only one in four (25%) businesses said their cash flow has increased over the last three months, while 30% have seen it decrease.  The hospitality and retail sectors are again facing the greatest challenges. 40% of retail firms, and almost half (47%) of hospitality businesses, reported decreased cashflow. After a significant fall in Q3 2022, business confidence is now on the up. After business confidence plummeted to historically low levels in the second half of 2022, there has been a marked improvement in sentiment in the first quarter of 2023. Over half (52%) of firms believe their business turnover will increase over the next 12 months, up from 44% in Q3 2022. While profitability confidence has also improved, it continues to remain weaker than turnover confidence. 42% of businesses now expect their profits to increase over the next year, up from 34% in Q4 2022. Little discernible improvement to business investment over past six years Three quarters (75%) of respondents reported no increase to investment in plant/equipment. There has been little discernible improvement to investment over the past six years; only a quarter of firms planned to increase investment in Q1 2023, the same level as reported in Q2 2017. Inflationary pressures continue to ease slightly, but still remain the top concern Following a drop last quarter, the percentage of firms expecting their prices to rise shows further signs of easing, as it fell five percentage points from 60% in Q4 2022 to 55% in Q1 2023. The overall level of concern regarding inflation has dropped for the first time in over two years. However, at 74%, the level remains close to the historical high. Cost pressures are varied, but labour costs and utilities come out top overall Cost pressures vary considerable across sectors; 87% of hospitality firms reported utilities as a factor driving price increases while 86% of manufacturers cited raw materials. David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: “After a significant decline in business confidence in the second half of 2022, results from QES Q1 show an improvement in business sentiment as political turmoil and inflationary pressures show some signs of easing. “However, this comes from a very weak base, and while confidence has improved, this is yet to translate into an overall improvement of business conditions. Most SMEs still report no improvement to sales, cash flow, and investment. “Three years of economic shocks – Covid lockdowns, global supply chain crises, inflation, and Brexit – have taken a significant toll on UK SMEs. The QES Q1 data once again confirms that these shocks have disproportionately impacted the retail and hospitality sectors, which are once again most likely to be reporting worsening sales and cash flow.” Responding to the findings, Director General of the British Chambers of Commerce, Shevaun Haviland, said:  “Last month’s Budget included several positive measures for business, including increased childcare support as well as plans for full capital expensing. However, it did not go far enough to shift the dial on growth which remains stubbornly low. “The Government failed to tackle some of the major issues holding firms back from their potential, in particular energy costs and the tight labour market which remain top business concerns. “The Government’s new energy support package represents a drop of 85% in the financial help available to businesses. We reiterate our calls for increased, targeted support for those firms who desperately need it. “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 also ensure Ofgem has the necessary powers to properly regulate the industry. “While we welcomed the Government’s decision to add five new construction jobs to the Shortage Occupation List, 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.” What businesses say: “Increases in prices, in general, have affected profitability and cash flow to the point I am having to borrow more finance. If I don’t get the finance, my business will fold.”– Micro services firm in Northern Ireland “As an advanced manufacturing organisation, we have a huge reliance on energy, we’re a very high user consuming >27Giga Watts of electricity. Our fixed pricing contract expires in March and the uplift in cost will be >£5m so will need to be passed through to our customers.” – Large manufacturer in Business West “The market feels buoyant, lots of enquiries and activity, it doesn’t seem to fit with the mood music from government or the media.” – Small retail or wholesale firm in the East Midlands Link to QES infosheet Q1 2023

• 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.”