Chamber News

The British Chambers of Commerce has downgraded its UK GDP growth forecast for 2015 from 2.7% to 2.3%, following weaker than expected growth at the start of the year. However, the BCC believes the slowdown is temporary and the prospects over the medium term remain steady, with GDP growth predicted to be 2.6% in 2016 and 2017.

Commentating on the latest economic projections, Caroline Williams, Chief Executive of Norfolk Chamber, said:

“It is always disappointing when BCC have to downgrade their growth forecast but the unexpectedly low figures from the ONS on Q1 2015 made it unavoidable. While this slowdown will serve as a warning about the strength of both Norfolk and the UK’s economic recovery, I believe the Norfolk will secure steady growth in the years to come.”

Key elements of the economic forecast include:

Earnings and unemployment:

• The BCC forecasts total earnings growth (total pay including bonuses) of 2.4% in 2015, 4.0% in 2016 and 4.5% in 2017.
• UK unemployment, includingyouth unemployment, is expected to fall in each of the next three years. However, by 2018, youth unemployment will still be high at 13% – almost three times the overall unemployment rate.

John Longworth, Director General of the British Chambers of Commerce, said:

“Families around the country will be heartened to hear that average earnings are on the up and unemployment is falling. We forecast earnings growth will be significantly greater than inflation over the coming years. However, despite the progress in tackling unemployment, youth unemployment – while falling – will remain stubbornly high.

Caroline Williams, Chief Executive of Norfolk Chamber said:

“Norfolk is striving towards improving youth unemployment with projects such as Norwich 4 Jobs and apprenticeship programmes. Currently 11% of Norfolk businesses employ an apprentice. From August 2014 – January 2015 there were 3,640 new apprenticeships started, which represents a 16.5% increase of the previous year’s figures. Apprenticeships will not only give our young people the skills they need, but the experience and ‘on the job’ training. Apprenticeships also offer local employers the chance to mould their new recruits and effectively grow their own future workforce.”

Trade deficit and exports

• The BCC forecasts the real net trade deficit will rise in 2015, increasing from 2.7% to 2.9%.
• Increases in real exports are predicted of 3.6% in 2015, 2.0% in 2016 and 2.2% in 2017. For real imports the BCC predicts increases of 4.1% in 2015, 1.5% in 2016 and 1.7% in 2017.

John Longworth, Director General of the British Chambers of Commerce, said:

“The one area which causes most concern is the increasing trade deficit. The growth we see is built on consumer spend and this has been a systemic weakness for years. Despite good intentions, we are heading the wrong way. The trade deficit is an economic time-bomb waiting to go off. We have to confront it head-on and that means getting more of our businesses exporting their goods and services overseas. Restructuring our economy in this way remains the best route to securing high levels of sustainable growth over the long-term.”

Business investment

• Business investment is volatile but will remain relatively strong with 4.4% growth in 2015. However, this is lower than the 7.5% in 2014.

John Longworth, Director General of the British Chambers of Commerce, said:

“While we expect steady levels of business investment, the fall from 2014 figures suggests the uncertainty over the annual investment allowance is acting as a drag on business decisions. In the Budget, we need the Chancellor to address this and unveil a long-term annual investment allowance which gives businesses clarity and certainty.”

Interest rates

• The BCC forecasts an increase in UK official interest rates is a year away, with a rise to 0.75% in Q2 2016. Rates will then be subject to small, incremental rises reaching 1.75% in Q4 2017.

John Longworth, Director General of the British Chambers of Commerce, said:

“It is right to keep rates at their current level for the next year at least and any increases thereafter should be slow and steady. After having stable, predictable rates for years – we don’t need the shock treatment of great leaps to the cost of borrowing.”

Reflecting on the overall economic forecast, John Longworth, Director General of the British Chambers of Commerce, said:

“The Government should be unapologetic in supporting British businesses and setting the regulatory and business finance systems to help them thrive. I want this to be the Parliament of growth. To deliver that we have to help businesses get the access to finance they need, and make a serious investment in our transport, digital and energy infrastructure. If we get these things right, British businesses will have the world as their oyster.”

Caroline Williams, Chief Executive of Norfolk Chamber said:

“Norfolk’s continued economic recovery requires the Government to favour enterprise, wealth creation and growth. We also need the Government to follow through on the announcement’s made in the Autumn Statement last year and deliver the necessary funding for Norfolk’s infrastructure improvements, which will enable the Norfolk business community to create jobs and deliver economic growth and prosperity to our region.”

David Kern, Chief Economist at the BCC, said:

“In spite of the downgrading of our 2015 growth forecast, UK prospects remain solid overall. The slowdown this year is likely to be temporary. Earlier falls in oil, food and other commodity prices continue to support UK growth, and Britain’s flexible and vibrant labour market is a major source of strength for our economy.

“International comparisons also show the UK is in a good position. In 2014, the UK grew faster than other G7 economies. Our new forecast suggests that we will remain near the top of the G7 league table over the next three years.

“But the UK recovery continues to face obstacles. Globally, confidence is too dependent on abnormally low interest rates and huge quantitative easing programmes. In spite of better eurozone prospects, a Greek default could trigger a new crisis, and, of course, the two largest global economies – the US and China – are experiencing slowdowns.

“Domestically, UK growth is relying unduly on consumer spending. Progress towards rebalancing the economy towards exports has been inadequate and the real trade deficit continues to get worse. This is troubling, especially at a time when we are carrying such a heavy current account deficit.

“The UK’s ability to generate tax revenues has worsened, due to big falls in oil and gas output and lower profits of UK banks. We will have to adjust to this harsher and more difficult reality. It is therefore vital that we focus on policies that support higher productivity and a strong recovery in exports, while persevering with the necessary and difficult job of cutting the fiscal deficit.”

Other elements from the economic forecast:

Main components of demand

• We forecast a slight upturn in household consumption growth to 2.6% in 2015, before easing to 2.4% in 2016 and 2.2% in 2017.
• UK business investment rose by 7.5% in 2014, but in Q1 2015 was only 3.7% higher than in Q1 2014. We are predicting business investment growth of 4.4% in 2015, 7.2% in 2016, and 7.4% in 2017.
• Our forecast is that the real net trade deficit will rise from 2.7% of GDP in 2014 to 2.9% in 2015 and then fall to 2.5% in 2017.
• Our forecast is that the UK current account deficit will improve gradually, from 5.5% of GDP in 2014 to 3.7% of GDP in 2017, this is still a very high and potentially risky shortfall.
• Our forecast envisages increases in real exports of 3.6% in 2015, 2.0% in 2016 and 2.2% in 2017. For real imports we predict increases of 4.1% in 2015, 1.5% in 2016 and 1.7% in 2017.
• Quarterly GDP growth, after slowing to 0.3% in Q1 2015, is likely to accelerate to 0.7% in Q2 2015, and then stabilise at a trend rate of just over 0.6% per quarter from Q3 2015 onwards.

Main sectors of the economy

• Service sector output is forecast to grow by 2.8% in 2015%, 2.8% in 2016 and 2.8% in 2017. The share of services in total UK output is likely to rise a little further in the next few years.
• For total industrial output, we are forecasting growth of 0.9% in 2015, 1.5% in 2016 and 1.5% in 2017.
• We are forecasting full-year manufacturing growth of 1.4% in 2015, 2.0% in 2016 and 2.0% in 2017.
• Our forecast envisages growth in construction output of -0.7% in 2015, 2.2% in 2016 & 2.1% in 2017.

Official interest rates

• We expect the first increase in UK official interest rates, to 0.75%, in Q2 2016, one quarter later than we previously predicted.
• We expect to see incremental rises thereafter before reaching 1.75% in Q4 2017.

Earnings and unemployment

• We now predict that total earnings growth (total pay including bonuses) will average 2.4% in 2015, 4.0% in 2016 and 4.5% in 2017.
• The UK unemployment rate is forecast to fall from 5.5% in Q1 2015, to 5.0% in Q1 2016, 4.7% in Q1 2017 and 4.6% in Q1 2018.
• We are forecasting total UK unemployment to fall from 1.83m in Q1 2015, to 1.63m in Q1 2016, 1.58m in Q1 2017, and 1.54m in Q1 2018 – a net fall in the jobless total of 283,000 over the next 3 years.
• We are forecasting that total UK youth unemployment (people aged 16 to 24) will fall from 736,000 (a jobless rate of 15.9%) in Q1 2015, to 601,000 (a jobless rate of 13.0%) in Q1 2018, a net fall of 135,000.

Public finances

• Public sector net borrowing in the full financial year 2014/15 was £2.5bn lower than the OBR predicted in the March 2015 Budget. In 2015/16, we also expect slightly lower borrowing than the OBR predicted in the Budget.
• However, the OBR’s timetable for subsequent years is still slightly too ambitious in our view. While the OBR is forecasting that UK public sector net borrowing would move into a small surplus in 2018/19, our view is that achieving this aim this would take one year longer (2019/20).

Inflation

• In annual average terms, we are forecasting annual CPI inflation at 0.2% in 2015, 1.5% in 2016 and 2.0% in 2017. In Q1 we predicted 0.3% in 2015, 1.7% in 2016 and 2.0% in 2017.

The British Chambers of Commerce UK and global economic review for June is based on May 2015 data releases.

This month’s headlines:

• UK GDP growth unrevised in Q1, weighed down by a widening trade deficit
• UK slips into deflation, but a prolonged period of negative inflation remains very unlikely
• Eurozone and Japan outlook still weak, despite growing faster than the UK in Q1

UK GDP growth was unrevised at 0.3%. In annual terms the UK economy grew by 2.4% and the economic output is currently 4% above it’s pre-recession peak in Q1 2008.

Inflation turned negative for the first time since 1960. However it is expected that a prolonged period of deflation is unlikely and the main reason for the fall in inflation is a decline in oil prices.

Japan, the world’s third largest economy, grew by 0.6% in the first 3 months of 2015, which is double that of the previous quarter. Despite this improvement, the economic output is still 1.4% lower in annual terms and with trade and investment showing little signs of growth, the picture remains weak.

The full review is attached.

Marcus Mason, Head of Business, Education and Skills, comments on the new government’s likely impact on the relationship between education and business.

In this Business Update video Marcus Mason gives us his views on how the new government’s policies will relate to the Norfolk Chamber’s wide campaign to bridge the gap between education and business.

Referring to the British Chambers of Commerce manifesto, into which Norfolk Chamber members had a major input, he foresees more effort being put into the development of key skills, including teamwork and communication. Similarly he predicts that Apprenticeships will be high on the agenda, although he expresses concern over where the funding will come from if the targets are to be met. Pointedly he raises the question that an increase in quantity of Apprenticeships brings with it an attendant danger of a decrease in quality.

Marcus also raises an issue that has a direct relevance to our region. Predicting a rise in the devolution in skills funding, he points out that London is already benefitting from the policy. But what of the rest of the country? For Norfolk to deliver its potential we must be supported with the necessary funding to allow our young people to cross that bridge between education and commerce, enabling them to contribute to the continued growth and development of our businesses.

It’s a profound point and one that must be high on our agenda for the immediate future.

Norfolk Chamber today (Tuesday 02 June) welcomed the decision by the Secretary of State for Transport, Patrick McLoughlin, to grant development consent for the Northern Distributor Road (NDR).

Summary of the Secretary of State Decision:

The Secretary of State has decided under section 114 of the 2008 Act to make with modifications an Order granting development consent for the proposals in this application. This letter is the statement of reasons for the Secretary of State’s decision for the purposes of section 116 of the 2008 Act and regulation 23(2)(d) of the Infrastructure Planning (Environmental Impact Assessment) Regulations 2009.

Caroline Williams, Chief Executive of Norfolk Chamber of Commerce said:

“This news is another positive step toward getting the improvements to Norfolk’s infrastructure which the business community has been calling for. Norfolk Chamber is delighted to hear that the Government has given the go-ahead for the NDR and look forward to work starting as the earliest possible opportunity. The NDR is not just a piece of road but the opportunity to unlock jobs and new homes for the city and surrounding area.”

Investment in the Northern Distributor Road (NDR) will help unlock thousands of jobs that are required by our young people and will provide the infrastructure to support the development ofup to 10,000 new homes. It will open up the north east sector of Norwich, including Norwich International Airport, which will benefit a broad spectrum of the business community, from transport and logistics through to retail and tourism. It will help improve journey time reliability and has the potential to reduce traffic congestion within Norwich City Centre, again benefitting thousands of commuters and the companies they work for.

The decision has been widely welcomed by businesses in Norfolk. Below are just a few of the positive comments from Chamber members:

Jonathan Cage, Vice President of Norfolk Chamber / Managing Director of Create Consulting Engineers Ltd

“The NDR is a long overdue strategic piece of infrastructure for Norwich. The implementation of this route will unlock the potential of the employment areas to the north of Norwich; assist freeing the city centre of through traffic movements; and will generally allow better access for the growth areas in the east. It is another demonstration, following the Government’s investment in the A11, of how Norwich is being seen as a exciting place to invest, it is hoped the construction process will be straight forward and seamless and then the Norfolk businesses community can get on with process of showing a return for our local economy.”

Peter Foster, Chair of Norwich Chamber Council / Managing Director ofHugh J Boswell Ltd

“I am delighted with the positive outcome for the NDR. It is incredibly clear to me that some of the Northern aspects of our city and indeed County will benefit enormously. I know that in recent years there are certain areas that we have traditionally transacted less business for pure logistical reasons. Intuitively I believe that the NDR will transform the northern part of the city and encourage growth in areas such as Holt, Sheringham, Aylsham and North Walsham. The NDR project certainly has the support of the Board at Hugh J Boswell Ltd.”

James Mason, Commercial Director of Norfolk Training Services

“It is very good news about the NDR. As Norwich expands and develops, the distances between the various parts of the city become more difficult to bridge. This new road will connect business and its customers by enabling delivery of a more efficient service, help working families to make better use of their time and open up opportunities for employment and career progression. In fact, it feels like Norwich is coming of age.”

Richard Marks, Head of Branch – John Lewis Norwich

“The secretary of state’s decision on the NDR is a positive move. John Lewis supports the Norwich Area Transport Strategy which is so dependent on the NDR coming to fruition – removing through traffic from Norwich City Centre and increasing pedestrianisation will be of huge commercial benefit to city centre retailers.”

Gary Howard, Director of Employer Partnerships – Norfolk Educational Services

“It is good news that the NDR has now been given the go ahead. The NDR will assist with delivering economic growth. It is vital that we provide good reliable access for businesses for them to be able to effectively and efficiently operate. The Northern Distributor road will vastly improve the existing and future businesses development, enabling them to flourish by avoiding the currently congested routes; resulting in increased supply of both goods and services. Logistics plays a vital part to many businesses and the improvements to this area would encourage businesses to grow and invest in Greater Norwich; whilst improving vehicle movement on the alternative routes hence freeing up some of the more congested routes.”

Mark Proctor, Partner – Lovewell Blake

“I am pleased to hear the positive news on the NDR. The benefits to the city and wider city area will be significant. It will greatly improve transport links for the north ofNorwich, which will assist businesses togrow and enhance inward investment opportunitiesfor Norwich and Norfolk. TheNNDR will form an essential part of the overall growth in housing planned for Norwichand thereby willplay a key part in the growth of the local economy formany years ahead.”

Those objecting to the NDR have one final throw of the dice, as they now have one last chance to mount a legal challenge to this decision.

Norfolk has long lagged behind other regions in terms of investment in our infrastructure and overall the Norfolk Chamber believes that the NDR will help contribute to economic prosperity in our region. It will deliver greater accessibility, provide infrastructure for new homes and new jobs and it should be welcomed. See what the Chamber thinks on the benefits of the NDR. The NDR and the benefits itcan bring are needed now.

Norfolk Chamber was pleased to receive a letter (attached) from Claire PerryMP, the Under Secretary of Statement for Transport confirming the decision to grant the development consent. We would now call for the project to moveforward at a swift pace, with construction commencing before the end of 2015.

Norfolk Chamber welcomed the Government’s commitment to reduce the amount of red tape that is burdening small businesses. In the Queen’s Speech last week, the Government outlined the measures in the Enterprise Bill to reduce the regulations on small businesses to help them to create jobs and to reward entrepreneurship.

The purpose of the Bill is to cement the UK’s position as the best place in Europe to start and grow abusiness, by cutting red tape and making it easier for small businesses to resolve disputes quickly and easily.

The Government aims to create a ‘Small Business Conciliation Service’ to help resolve business-to-business disputes, especially over late payment. Data from Hitachi Capital Invoice Finance shows that 26% of invoices are paid after the agreed 60 days to SME businesses in Norwich.

Another aspect of the Enterprise Bill is a commitment to improving the business rates system ahead of the 2017 revaluation, including modernising the appeals system. In particular, the introduction of business rates appeals reform, including modifying the Valuation Tribunal powers to consider ratepayer appeals and allowing the Valuation Office Agency to share information with local government to improve the system for both local government and ratepayers.

Commenting on the Queen’s Speech, Caroline Williams, Chief Executive said:

“Simplifying life for small or growing businesses should be an objective shared across the political spectrum. If properly targeted the Government’s efforts to cut red tape for business could make a real difference – saving time and money. However, as much of the most costly regulatory burdens are created by the EU, cutting red tape will be a challenge.

“The government also has a role to play in helping to alleviate both the cause and effect of late payments. But, in order to truly change the culture of late payment, we need to see a concerted effort from businesses themselves.”

Although reducing red tape is a national rather than a local issue, this is important for Norfolk business and is therefore included in our Business Plan for Norfolk. The British Chambers of Commerce (BCC) is driving forward on this agenda, as stated in theirBusiness Manifesto, and need our local support.

When taxes, and other costs like energy, increase as a result of national government policy, it’s business growth, investment and jobs that suffer. The UK has the highest business rates in Europe, increasing costs before a single sale is made. Norfolk Chamber and the BCC called for:

• Freeze Business Rates for all companies until 2017 and carry out a full revaluation of premises in 2017
• Review the Business Rates system by 2017 with the aim of delivering a competitive local tax system by 2022
• Merge income tax and employee National Insurance Contribution for full tax transparency
• Pledge no new measures which would increase energy costs for the life of the next parliament

The Queen’s Speech outlined the key elements of the Enterprise Bill, which will go some way towards addressing our concerns and meeting the Chamber ask.

Norfolk Chamber was pleased to see that last week’s Queen’s Speech highlighted several measures in the Government’s ‘One Nation’ vision that will help to support and develop the talent of Norfolk’s young people.

The new Full Employment and Welfare Benefits Bill is expected to help create two million more jobs across the UK this Parliament. To help Norfolk’s young people get those jobs, they will need to be given the support, skills and experience that they need to fulfil their potential.

The Government is also looking to create a further three million more apprenticeships over the next five years, which includes about 27,000 apprenticeships in the East of England. Currently 11% of Norfolk businesses employ an apprentice. From August 2014 – January 2015 there were 3,640 new apprenticeships started, which represents a 16.5% increase of the previous year’s figures.

Apprenticeships will not only give our young people the skills they need, but the experience and ‘on the job’ training. Apprenticeships also offer local employers the chance to mould their new recruits and effectively grow their own future workforce.

The Government also intends to put in place a new Youth Allowance for 18 to 21 year olds with stronger work related conditionality from Day 1. After 6 months they will be required to go on an apprenticeship, training or community work placement. The also intend to provide Jobcentre Plus adviser support in schools across England to supplement careers advice and provide routes into work experience and apprenticeships.

The Enterprise Bill will help smaller businesses to contribute towards economic growth and to make it easier for them to create more local jobs, the Bill will introduce measures to reduce regulations on small businesses, thereby cutting the ‘red tape’.

The Education and Adoption Bill will escalate the Government’s academy programme which aims to speed up the intervention in failing or ‘coasting’ schools and will create the power to take over these schools and create more sponsored academies. Based on the latest Ofsted report, there are 90 schools in Norfolk that are currently in the second worse ‘requires improvement’ rating. The speech indicated that those schools with an ‘inadequate’ rating would usually become an academy.

Commenting on the Queen’s Speech, Caroline Williams, Chief Executive of Norfolk Chamber said:

“We welcome the Government’s focus on raising standards in schools, but businesses also rely on the education system to equip young people with the soft skills and attitude they need to successfully make the transition to work. The government could also help to generate a pipeline of young talent by ensuring that secondary schools are measured on pupil destination and earnings, by guaranteeing a business governor in every secondary school and ensuring that every student leaves school with high quality exposure to business.”

One of Norfolk Chamber’s key campaigns for the coming year is ‘Developing the Talent of Norfolk’s Young People’. This is something that the Chamber is passionate about and has been involved in for some time.

The support for schools on business/education was improving a few years ago, but I am sorry to say it has taken a large and disappointing leap backwards in recent years due to Government changes in policy. We are please dot see the Government addressing some of the issues surrounding schools and actively pushing apprenticeships, but more work needs to be done to bridge the gap between the world of education and work. The Chamber will continue to work with our education and business members to ensure that we work in partnership towards closing that gap.

There were no major announcements within the Queen’s Speech last week for infrastructure projects in the UK, with the exception of the High Speed 2 (HS2) Bill. David Cameron’s introduction to the speech said: “This Queen’s Speech will bring every part of our United Kingdom together. Our legislation will make sure this recovery reaches everyone, from the oldest industrial towns to the remotest rural villages. Our High Speed 2 Bill will help bring our great northern cities together in a Northern Powerhouse that rivals the biggest cities in the world.”

Norfolk and the East of England have been major contributors to the ongoing economic recovery of UK plc and continue to strive to compete at a national and international level. However to do do this we need to improved infrastructure. Norfolk has historically lagged behind in terms of infrastructure and Norfolk Chamber and our members, from start ups to our large scale members have been lobbying hard for those improvements. In December last year the previous Coalition Government announced funding in the Autumn Statement to deliver improvements along the A47.

Improvements announced in Autumn Statement:

• A47 North Tuddenham to Easton: dualling to provide continuous dual carriageway between Norwich and Dereham; combined with the Blofield to North Burlingham scheme, this will provide full dualling between Dereham and Acle.

• A47 Blofield to North Burlingham: dualling to complete a gap in the dual carriageway between Norwich and Acle; combined with the North Tuddenham to Easton scheme this will provide full dualling between Dereham and Acle.

• A47/A12 Great Yarmouth: junction improvements, including reconstruction of the Vauxhall roundabout.

• Safety improvements at key hotspots and joint working with Natural England to establish environmental impacts and mitigation measures for the medium and long term which could include installation of safety barriers, junction improvements and road widening or capacity improvements.

• A47/A11 Thickthorn junction: improvement of the interchange to give improved access to Norwich.

The Chamber’s ‘Business Plan for Norfolk’ highlights the need for improvements to Norfolk’s infrastructure to help further develop economic growth. Norfolk Chamber and our members continue to lobby hard to draw attention to Norfolk’s needs. We are members of the A47 Alliance; have heavily supported the rail improvement campaigns; and have been vocal in our support for the NDR. We are also calling for improved Broadband and mobile coverage, as well as driving down the costs of doing business i.e. reductions in red tape and regulatory burdens on Norfolk businesses.

Commenting on the Queen’s Speech, Caroline Williams, Chief Executive of Norfolk Chamber said:

“Businesses in Norfolk will continue to strive to deliver economic growth, but they need to have the confidence to invest in their organisations, both in terms of plant and machinery, as well as personnel. Norfolk’s continued economic recovery requires the Government to favour enterprise, wealth creation and growth and the Queens Speech indicated positive steps in towards these goals.

Norfolk Chamber would like to see the Government to follow through on the announcement’s made in the Autumn Statement last year and deliver the necessary funding for Norfolk’s infrastructure improvements, which will enable the Norfolk business community to create jobs and deliver economic growth and prosperity to our region.”

Monday (01 June 2015) is a milestone date for pension reforms. From this date, certain SMEs, with less than 30 staff will have to start to comply with the new work place pensions legislation and by April 2018 all SMEs will have to comply. Those who don’t comply, could face fines of up to £500 a day. In the UK this will affect 1.3 million employees.

There are 30,000 active businesses in Norfolk, with SMEs being the backbone of our economy. Collectively, these businesses employ hundreds of thousands of employees and all will eventually be affected by the pensions legislation.

There are different staging dates for SME employers to comply with the pensions legislation – the Pensions Regulator website has a step-by-step guide to help you, but click here to check when your compliance date comes into effect. Norfolk Chamber would also recommendthat one of the first steps that employers should take should be tospeak to their accountant or financial advisor or their existing pension provider.

In the UK at present there are around 10 million people eligible for auto enrolment and 5 million have already been enrolled. Currently, just 9% of savers are opting out, which highlights the fact that if it’s made simple and easy for people to save then, by and large, people will do so.

What is Automatic enrolment?

A portion of an employee’s wages is diverted to their pension fund, assuming they are aged between 22 – 65 and earning more than £10,000 a year. Employers are obliged to pay in as well, with the Government adding a further small sum through tax relief.

Initially, an employee will see a minimum of 0.8% of their earnings going to their workplace pension and tax relief will adds a further 0.2%. The employer is obliged to add a contribution of 1% of the worker’s earnings. This rises to a 5% contribution from the employee, 3% from the employer, and 1% in tax relief in October 2018. However there are concerns that these pension savings may not be sufficient to ensure a reasonable income at retirement.

New Research

New research, out today from ‘Now Pensions’, reveals that one in four (27%) of all businesses who need to comply haven’t yet given any thought as to how they will find a provider. Whilst this is an improvement on 2014 – when four in ten (44%) of SMEs hadn’t thought about it – it still means that almost 350,000 businesses are unprepared.

Now Pensions highlighted that firms can’t bury their heads in the sand over auto enrolment; yet more half (52%) who haven’t yet found a pension provider, don’t think there will be any issue finding one. However this may be easier said than done, as not all employees are an attractive prospect to pension providers – especially those on lower salaries – and providers may not be willing to accept all employers and all employees on equal terms. Less than one in ten (9%) of SMEs appreciate this reality and worry that providers might ‘cherry pick’ business.

They also noted that the complexity of the subject compounds the issue; a third (34%) of small firms don’t understand how auto enrolment contributions are calculated. Some companies – however – have at least given a bit of thought as to how they will go about finding a provider, with a quarter (26%) intending to seek help from their accountant; one in six (16%) saying the will rely on their existing scheme provider while one in eight (12%) will search the market and do the research themselves.

Norwich City Council have today (28 May 2015) published their latest economic barometer:

• The report highlights that UK borrowing fell to £7.4bn in March 2015, which takes the total for the financial year to £87.3bn. This is £11.1bn lower than last year’s total. UK inflation turned negative in April for the first time one record when it fell to -0.1% and GDP increased by 0.3% in the first quarter.

• According to a survey by the property group LSL plc, the cost of renting a home rose by 4.6% in the year to the end of April, which is the fastest increase since November 2010. The average rent stands at £774 in England and Wales.

• Construction leaders in East Anglia have said that home building and major infrastructure projects are back underway post-recession and they expect the sector to grow again this year – subject to resources and recruitment meeting the demand.

• Proxama, a Norwich technology firm have recently announced that they are looking for a new head, as the founder and Chief Executive, Neil Garner is stepping aside to concentrate on developing new products for the business. Accountancy firm Ashton Shaw continued its expansion strategy by acquiring its Norwich-based competitor, Roger Hopkins.

• The University of East Anglia retained its Top 20 position in the prestigious Complete University Guide 2016 and is ranked 16th.

To read the full report click here.

Giving her reaction to the Queen’s Speech, Caroline Williams, Chief Executive of Norfolk Chamber of Commerce said:

“Businesses in Norfolk continue to strive to deliver economic growth. To do this they need to have the confidence to invest in their organisations both in terms of plant and machinery, as well as personnel. Norfolk’s continued economic recovery requires the Government to favour enterprise, wealth creation and growth and the Queen’s Speech indicated positive steps in towards these goals. We also need the Government to follow through on the announcement’s made in the Autumn Statement last year and deliver the necessary funding for Norfolk’s infrastructure improvements, which will enable the Norfolk business community to create jobs and deliver economic growth and prosperity to our region.”

Giving his reaction to the Queen’s Speech delivered today, John Longworth, Director General of the British Chambers of Commerce (BCC) said:

“If the last Parliament was defined by austerity, this one should be defined by growth. And the government needs a confident, unapologetic programme to deliver that sustained growth. What we have seen in the Queen’s Speech is a positive start, and overall the message appears to be one of ambition, enterprise and growth for firms across the country.

“Businesses will welcome the government’s proposals to cut red tape, the move to more local decision-making and progress on an agenda which will see the UK reform its relationship with the EU before holding a referendum.

“While recognising that an incoming government cannot do everything at once, alongside these encouraging ideas, businesses will want to see the government seek to ease the housing crisis and tackle access to childcare in a sustainable way. Firms will also be concerned by the absence of any concrete measures to ensure young people are ready to make the transition from education to work and, crucially, measures to bring about a revolution in the UK’s export performance.”

Commenting on specific elements from within the Queen’s Speech, John Longworth said:

On the Enterprise Bill:

“Simplifying life for small or growing businesses should be an objective shared across the political spectrum. If properly targeted the government’s efforts to cut red tape for business could make a real difference – saving time and money. However, as much of the most costly regulatory burdens are created by the EU, cutting red tape will be a challenge.

“The government also has a role to play in helping to alleviate both the cause and effect of late payments. But, in order to truly change the culture of late payment, we need to see a concerted effort from businesses themselves.”

On the Trade Union Bill:

“Individuals and businesses depend on transport, education, and healthcare service, so the right to strike must only be exercised with the greatest restraint. Higher standards should apply when a strike puts people at risk or affects the ability of large numbers of their fellow citizens to earn a living, creating equity between the right to work and the right to withdraw labour. In the eyes of businesses, large and small, this legislation has merit, as it would help ensure essential services and the freedom to work in the event of strike action.”

On the EU Referendum and EU Finance Bills:

“Our research shows that British businesses want to remain in the EU, but a different EU, one which has been reformed. They want the Union to work better for them, now and in the future. The government must pursue a reform agenda that gets the single market working properly for UK businesses trading in Europe; addresses what it means for us to be part of the union, but not part of the monetary union; creates safeguards for non-Eurozone countries in EU decision-making; and ensures that the EU adopts a relentlessly pro-business, pro-growth agenda that minimises regulatory burdens.

“A referendum should be held as soon as is practicable to minimise further business uncertainty.”

On the Housing Bill:

“The housing shortage is a brake on business growth and employment in many parts of the UK. Yet the problem isn’t that we’re selling too few houses, it’s that we don’t build enough of them. Businesses would rather see the government focus their efforts on freeing up more land for much-needed housing, including, where necessary, on the green belt. An annual target of 200,000 new homes built by the private-sector should be central to the government’s housing ambitions.”

On the Childcare Bill:

“Expanded access to childcare is a win-win solution for employers and parents alike, enabling more talented individuals, should they wish, to stay in work. However, past commitments to raid pensions savings, even to pay for a business priority such as childcare, will dismay entrepreneurs, for whom long-term rewards are often more important than short-term pay. We hope the Government reconsider and move towards a more cost effective method of supporting working parents through a fiscally neutral Childcare Contribution Scheme, as outlined in the British Chambers of Commerce Business Manifesto.”

On the National Insurance Contributions/Finance Bill:

“Freezing income tax, along with some other major taxes for the next five years, would leave the government with little wiggle room, particularly if economic circumstances were to change. This has the hallmark of posturing, not planning.”

On devolution:

“Businesses across the UK broadly support the concept of further devolution of decision-making powers. Whether it’s devolution to the nations or within the nations of the UK, the transfer of powers must deliver greater efficiency and greater accountability at a local level, with businesses having a say in local economic development. If we get devolution to work for business, we will create sustainable growth and job creation for many years to come.”

On the Immigration Bill:

“The government is right to strike a balance between the legitimate concerns of communities regarding immigration and the vital needs of businesses and the broader economy. If we are to have wealth creation that benefits all and deliver long-term growth, then businesses must have access to the skills they need and sometimes that means drawing on talent from outside the UK, while at the same time maintaining stability and social cohesion. Immigration should be based on a points system, flexed according to economic need.

“But these proposals must go hand in hand with measures to equip young people with the skills they need to compete in a country with open borders and recognising the need for improvements in productivity. Not least, when youth unemployment is three times higher than the average, balancing these factors is the key to achieving long-term economic success and social cohesion.”

On the Education and Adoption Bill:

“It is welcome that the Government is focused on raising standards in schools, but businesses also rely on the education system to equip young people with the soft skills and attitude they need to successfully make the transition to work. The government can help to generate a pipeline of young talent by ensuring that secondary schools are measured on pupil destination and earnings, by guaranteeing a business governor in every secondary school and ensuring that every student leaves school with high quality exposure to business.”

On the High Speed Rail Bill:

“Britain desperately needs world-class infrastructure, including on the rail network. HS2 will deliver the step-change in capacity that Britain’s north-south railways need. Parliament must progress the HS2 Bill as swiftly as possible to ensure the benefits of the scheme are felt far and wide.”

The British Chambers of Commerce Quarterly Economic Survey (QES) is used by the Bank of England, the Chancellor to plan the future of the UK economy, it is also closely watched by the International Monetary Fund.

Why should you complete the QES? – here’s why!

As a part of the accredited Chamber network, Norfolk Chamber needs your input to ensure that Norfolk has a clear voice on our local and national economy. You can have your say by completing the QES online NOW, which takes less than 3 minutes.

The completion deadline for this survey is Monday 15 June 2015.

Norfolk key findings in the Q1 2015 QES:

• After strong increases recorded in Q4 2014, almost all the Norfolk balances for both manufacturing and services weakened in Q1.
• In both sectors, a number of key Q1 balances are now lower than their pre-recession levels in 2007.
• In Norfolk’s manufacturing, domestic balances were reduced; domestic sales (+12%, down from +13% in Q4 2014,) and domestic orders (+8%, down from +14% in Q4 2014).
• In services, the domestic balances were mixed; domestic sales (+35%, down from +51% in Q4 2014) but domestic orders increased (+29%, up from +17%).
• Most export balances weakened in Q1 2015; manufacturing export sales fell by 9 points to +21%, while service export sales fell considerably by 44 points to +16%.
• Both manufacturing and services firms have lowered their investment intentions for training, as well as plant and machinery.

More results from previous quarterly economic surveyscan be seen by clicking here.

Click here to complete the Q2 2015 QES now.

Securing promotion once again to the Premier League means that Norwich City Football Club not only benefits from a more secure financial position, but Norwich and Norfolk as a whole also profit from a higher national and international profile, which all helps to promote our excellent local businesses and provides a boost to our exporters.

The Norfolk business community is always very reactive to what is happening locally, this is especially true when Norwich City wins. When the team gets a good result, then the overall ‘feel good factor’ can be seen in boosted staff morale and increased productivity, which in turn contributes to further economic growth.

Norwich City Football Club’s promotion to the premier league firmly puts Norfolk back on the global stage and raises our visibility, which can only benefit the Norfolk business community.