Chamber News

• BCC’s Quarterly Economic Survey is the first major economic indicator of the year, and is closely watched by the Bank of England and the Treasury
• Positive Q4 survey suggests that growth will continue and probably strengthen further in the short term
• Most Q4 key balances are higher than their pre-recession levels in 2007
• Norfolk’s manufacturing export balances continued to increase
• Norfolk’s service sector domestic balances increased considerably
• On the basis of these results, the BCC believes GDP growth in Q4 2013 could be 0.9%

The British Chambers of Commerce’s Quarterly Economic Survey (QES) released today (Tuesday) provides further evidence that the UK economy is growing at a solid pace, and could even strengthen in the short term. The Q4 survey, made up of responses from nearly 8,000 businesses, shows improvements in most areas for both the manufacturing and service sectors, and that all key balances are stronger than their long-term historical averages.

In the manufacturing sector, key balances are at all time highs, and domestic balances in the services sector continue to break new ground. But the recovery must be maintained, as risks persist around access to finance for firms looking to expand, and rectifying this is vital in moving the Norfolk economy from being merely good to being truly great.

Key findings in the Q4 2013 Quarterly Economic Survey:

• For both Norfolk manufacturing and services, all the major Q4 balances are stronger than their long-term averages, and most are higher than their 2007 pre-recession levels.
• Key manufacturing balances remain strong, allaying fears in Q3 that the growth spurt in manufacturing was temporary: domestic orders (+21%), turnover confidence (+45%), and profitability confidence (+35%).
• Export balances in the Norfolk services sector are at record highs for the survey: export sales (+69%), and export orders (+66%).
• In addition, the services sector employment balance rose seven points to +24%.
• But some concerns do exist. In manufacturing, the key Norfolk balances for domestic sales and orders fell slightly, although these are still strong results.
• Manufacturing cashflow in Norfolk fell back from Q3, which underscores the need to promote access to finance, so businesses can expand to meet growing order books.
• Intentions to raise prices rose in both manufacturing and services, while inflation and corporation tax both remain major areas of concern for businesses.

Commenting on the results, Caroline Williams, Chief Executive of Norfolk Chamber of Commerce said: “It is a fantastic to start the New Year with a very positive quarterly survey. Confidence is high and our members are resolute in their determination to take the recovery from being good to being truly great. Firms from all sectors across the County believe they can create jobs, invest, and export. It is especially pleasing that the spurt in the manufacturing has proven not to be a fluke, which demonstrates the dynamism of our small, high value, manufacturing sector. But Norfolk businesses have major ambitions, and to be able to meet them, more support must be provided.”

“Cashflow continues to be an ongoing concern, and may hold businesses back from expanding to meet the growing levels of demand. We must give companies the opportunity to get the finance they need to go out and trade the world if we are to succeed in rebalancing the economy.”

Commenting on the results, John Longworth, Director General of the BCC, said: “As the 2015 General Election looms ever closer, the government cannot afford to get distracted by short-term political infighting. Long-term growth strategies must be delivered with a strong national consensus, particularly around the infrastructure investments that the country sorely needs. Only then will we have an environment that fosters enterprise and an economy which meets its true potential.”

David Kern, Chief Economist at the BCC, said: “With most key balances in this quarter higher than their pre-recession levels in 2007, it is clear that the UK recovery is likely to continue to strengthen in the short term. On the basis of these results, GDP growth in Q4 could well be around 0.9%, and higher full-year growth in 2013 and 2014 could follow. The optimism around medium-term growth prospects refutes the fashionable defeatist talk in some quarters of ‘secular stagnation’.

“The strong export and investment balances confirm that UK business is set to play a key role in rebalancing the economy. However while the overall message from this survey is positive, there are risks that should prevent complacency creeping in. The eurozone’s basic problems have not yet been resolved, which could adversely impact our exporters, and inflation remains a major concern.

“This means it is vital to prevent setbacks as the economic recovery gathers pace. The MPC must continue with its forward guidance on interest rates, and remain steadfast in its plans to keep inflation low and meet the 2% target. On its part, the government has to work to increase the flow of lending to growing businesses through a fully-funded Business Bank, to ease the logjam of those firms striving to expand.”

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The impact of Business Rates on local businesses, and responses to Norfolk County Council’s Putting People First budget consultation, will keep the council’s Environment, Transport & Development Panel in session all day on Tuesday 14 January at County Hall, Norwich.

The morning session (10am, Council Chamber) has been set aside for businesses and their representative organisations to give their views on the current system of Business Rates.* (See release issued 14 December: www.norfolk.gov.uk/News/NCC129490 .) Representatives from Norfolk Chamber of Commerce will be attending this session.

In the afternoon (2pm) the Panel will consider all other items on the agenda, including the public response to savings proposals in the areas of waste and recycling, public transport support, road maintenance, planning and trading standards. These formed part of the ‘Putting People First’ consultation that ran for 12-weeks between September and December and sought views on how Norfolk County Council should plug a predicted £189 million funding gap**.

The report summarises the responses to proposals, including some high profile proposals:

Reducing the subsidy for the CoastHopper bus service by £150,000 over two years (currently £225,000 a year).

The majority of people responding opposed this, citing rural isolation, the impact on tourism and local businesses and the loss of an essential local service during the winter. Three businesses have expressed interest in sponsoring the service, and other suggestions to maintain the CoastHopper included a charge for concessionary pass holders and different fares for visitors and local people.

Reduce highway maintenance for one year (£1 million).

The majority of respondents were concerned about the impact on road surfaces and the potential for greater expense in the future.

Charging was seen as a practical way to maintain some services, but there was also concern that these could lead to higher costs elsewhere, such as increased fly-tipping and reduced recycling because of charging and reduced opening hours at some recycling centres.

There was concern that saving £330,000 on school transport would compromise the safety of children, as well as create difficulties for parents. However, over 100 respondents accepted the proposal with a range of views, some seeing home to school transport as the parents’ responsibility, and others seeing health and community benefits from improvements to footpaths and cycleways.

Scaling back Trading Standards advice to focus on legal responsibilities, saving £373,000, was accepted by some people, while others were concerned that it would lead to more rogue traders and bad business practices, with concern that older and vulnerable people would be at risk.

David Harrison, Cabinet Member for Environment, Transport, Development and Waste, said: “I am not in the least surprised that people oppose many of these spending cuts and new charges, but we have to find some way of plugging the budget gap – and we are still waiting for Eric Pickles’ decision on the Willows, which could add to that pressure.

“What I can promise is that we will do everything we can to reduce the impact on our services and on Norfolk people. The many comments we have received will help us to do this, and I am grateful for the way in which people have put forward their own suggestions. For example, several businesses have shown interest in sponsoring the CoastHopper, and we will certainly be exploring these further because we recognise how much it is valued locally. On Tuesday Panel members will be able to have their say with the benefit of the feedback from Norfolk people and organisations.”

Dan Roper, Cabinet Member for Public Protection, said:

“The only way Trading Standards can make significant savings is by scaling back on services we don’t have to provide by law. In the consultation many people have recognised this, but some have also raised concern that older and vulnerable people will be more at risk from rogue traders and bad business practices. This is something we are already taking steps to mitigate, and if the reduction goes ahead** we will try to minimise the impact by careful targeting and dealing with the areas of highest risk, and by signposting people to other sources of high quality advice.”

Panel members will also have a chance to comment on how its annual allocation of highways and transport capital grant from the Government should be spent. Altogether £28.76m has been allocated to Norfolk, and it is recommended that nearly £25.4m should be spent on the planned structural maintenance of roads (such as resurfacing), nearly £1.4m on bridges and £2m for a range of small scale improvements including public transport, cycling, pedestrian and road safety schemes.

Structural maintenance is paid for by a capital grant from the Government and is used for resurfacing schemes, surface dressing, patching and other repairs.

Please Note: The proposed £1m one year reduction in road maintenance relates to the highways maintenance revenue budget which pays for day to day activities such as winter maintenance, street lighting, pothole filling, traffic light maintenance, verge cutting and weed spraying. The £1m reduction, if approved, would in 2014/15 reduce the refilling of grit bins, and delay some bridge and traffic light maintenance, the replacement of road markings and the renewal of safety barriers.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Paul Clarke is currently a Partner at Bidwells on Upper King Street in Norwich. Bidwells are long-standing members of the Chamber having joined in August of 2010.

Paul’s question to the Chancellor was:

“Whilst London, Cambridge and other selected ‘hot spots’ in the country continue to enjoy an almost recession proof local property market, do you see this revival happening in areas such as Norfolk? And if so do you believe that we need to do more to create a more balanced resurgence in the local economy that isn’t simply based on property values?”

Find on the attached document the written response from the Department for Communities and Local Government.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Elaine Mather is Relationship Director at Santander Corporate & Commercial Banking. Santander have been members of the Chamber since May of 2012.

Elaine’s question to the Chancellor was:

“I have come from a background of running businesses so am a business woman working for a bank. While running the businesses and during my banking day job I see people struggle with the basic fundamentals of running a business, the kinds of skills that are fundamental to the successful of any business, basic, not specialist skills.

Why do we not have business skills built into a school curriculum as an essential life skill, which will conversely cross over into the private life of running a house, a budget etc. Why do we not teach and sit an exam for it?

We do not teach enough of the basic skills to all for young adults to be able to make informed, constructive decisions as and when needed to progress. I work with many schools and projects and can see progression for some but by no means all, it needs to be a part of everyday life not an extra.”

Find on the attached document the written response from the Department for Education and Childcare.

In contrast to previous months, November saw the number of claimants of the Job-seekers Allowance (JSA) rising from 4.7% to 5.1% in Great Yarmouth. Together with North Norfolk (8.2%) these were the only two districts in the County to see their JSA claimant rate rise.

As a result of this increase, Great Yarmouth now sees itself sat in 15th place on the national table of highest JSA claimants. Norwich saw the greatest fall in JSA claimants, as their rate fell by 5.2% closely followed by a 4.8% drop in Broadland.

On a better note for Great Yarmouth, data from a chartered Institute of Personnel Development (CIPD) survey of 1,000 employers revealed that the short-term jobs outlook is at its most positive for five years. And, whilst Great Yarmouth resident wages are lower than the rest of Norfolk, workplace wages remained higher, highlighting that there are still relatively well paid jobs available in Great Yarmouth.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Carole is joint Managing Director of the Norwich-based marketing company Osbornenash. Osbornenash have been members of the Chamber for nearly a year and a half having joined in August of 2012.

Carole’s question to the Chancellor was:

“When we started Osbornenash, the banks wouldn’t lend us any money for start-up costs such as computers etc. and during tricky cash flow months they wouldn’t extend our overdraft to help us pay staff or suppliers. We were lucky in that we have had a supportive family who leant us the money to ensure we stayed afloat, but what help is offered today for those in a similar position?”

Find on the attached document the written response from the HM Treasury.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Ian Tubby is the Operations Manager at Mecca Bingo on Aylsham Road, Norwich. Mecca Bingo have been members of the Chamber since May 2012.

Ian’s question to the Chancellor was:

“Does the Chancellor recognise the important role that Bingo plays in this community and others? And will he back growth, investment and jobs by supporting calls for reduced tax on an industry that is currently subjected to an equivalent of 32%.”

Find on the attached document the written response from the HM Treasury.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Gordon Chetwood is the Manufacturing Site Director at Kinnerton Confectionary on Oxborough Lane in Fakenham. Kinnerton joined the Chamber as members in May 2010.

Gordon’s question to the Chancellor was:

“Tony Blair, in his auto-biography ‘A Journey’ said that if had his time again he would not pursue a career in law, he would choose a career in manufacturing. Given that this is often the last choice of career for young people leaving school or education, how does the Chancellor believe we can change this perception and get more people to pursue a manufacturing career?”

Find on the attached document the written response from the Department for Education.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Peter Collins is the Business Manager at Reepham High School and College. Reepham High School have been members of the Chamber since October 2012.

Peter’s question to the Chancellor was:

“What guarantees can the Chancellor give that school funding will not be reduced particularly as agreement is being given for free schools leading to over-supply of places in some areas?”

Find on the attached document the written response from the Department for Education.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

James Kearns is the Chief Executive of BUILD Charity. They are based on Redwell Street in Norwich and have been members of the Chamber since 2005.

James’ question to the Chancellor was:

“Big Society seems to have slipped off the political agenda. Is it still a key government objective, and how is it being supported at a time when many local councils are cutting funding to the organisations best placed to deliver it?”

Find on the attached document the written responses from the Department for Communities and Local Government and the Cabinet Office.

As a follow up to the Norfolk Chamber’s ‘Audience with George Osborne, the Chancellor of the Exchequer’ event on the 7 November, we submitted a number of questions from our members to the Chancellor. Responses to those questions are now starting to be received from the relevant Ministers within Westminster.

Chris Conroy is one of two Managing Directors at Prior Diesel. Prior Diesel are based in Great Yarmouth and have been members of the Chamber for over 3 years.

Chris’ question to the Chancellor was:

“Whilst the financial and other assistance being offered to those who have never previously taken on an apprentice is to be applauded and encouraged. Could the Chancellor please tell me what is being offered to those established responsible employers who have continued to give such opportunities to young people throughout the recent tough economic times, who seem to be unable to receive any assistance?”

Find on the attached document the written response from the Department for Education.