Chamber News

The Family business, once a staple of British industry, is disappearing. Although two thirds of UK industry is made up of family business, fewer than 13% survive beyond the second generation.

A generation ago, family firms were thriving and the heirs were jumping at the chance of income, job security and ultimately the sense of pride of taking over the family legacy. But nowadays the future of family businesses is not so certain, children are choosing to follow their own career paths and are more reluctant to carry on the legacy and tradition of the family business.

Each year 30,000 businesses close because they can’t find someone to take over. With the help of leading business expert Alex Polizzi, the second series of this hugely successful programme, will guide and advise family businesses through some of the trials and tribulations a family run company can face – whether it’s how best to plan for the future and preserve the legacy of previous generations, or looking at ways to improve profitability and diversification and developing the business to make sure it’s a success for years to come.

Twofour want to hear from struggling family businesses who are finding it tough in the current economic climate and who are uncertain about the future of their business. To find out more please contact Celia 0207 438 1918 or email [email protected]

HMRC is introducing Real Time Information (RTI) for PAYE from April 2013. The vast majority of employers are required to start submitting PAYE returns in real time in April 2013 and all employers will be routinely reporting PAYE information in real time by October 2013.

From April, PAYE returns are electronically required each time a payment is made, as part of routine payroll processes. Employers operating their own payroll will need to consider and take the appropriate action to either update their payroll software, obtain new payroll software or, where an agent or payroll bureaux is used, discuss the changes with their payroll provider. During October HMRC will be writing to all employers telling them about RTI, advising what they should be doing to get their business ready for the changes to PAYE in April 2013, and signposting HMRC guidance.

Information on these changes can be found here.

The British Chambers of Commerce’s new Quarterly Economic Survey (QES) released today (Tuesday) shows that economic growth in the UK remains weak, with the Q3 results slightly worse than the previous quarter. The survey, comprising responses from 7,593 businesses across the UK including Norfolk, shows stagnation in the domestic market, and a fall in balances measuring exporting activity, although Norfolk appears to be bucking the national trend.

John Longworth, Director General of the British Chambers of Commerce, commenting on the results urged the government to focus on policies that will create the right business environment for firms to invest and grow.

“The Q3 2012 results confirm that improvements in the UK’s economic performance remain inadequate. While we do not agree with the ONS’ gloomy estimation that the UK was in technical recession for three consecutive quarters, it is clear that the economy is stagnant. Though most key Q3 balances are weaker than in Q2, the survey results could still signal a return to positive GDP growth in Q3, as weaker balances may not indicate a contraction in overall economic activity.”

Caroline Williams, CEO of Norfolk Chamber of Commerce said: “Despite the backdrop of the national results of weak economic growth and poor business confidence it is encouraging that Norfolk businesses report that in some areas they are doing better than the national figures.

Both the manufacturing and the service sectors are showing positive results around the future export orders, as well as their domestic orders. This has influenced their confidence in their turnover balances, which also rose and, for the manufacturing sector, are back at the levels last seen in Q4 2011. Confidence in their profitability dipped slightly, but these figures still reflect or are better than the national figures.

Norfolk businesses are working hard in these challenging economic times which will have a beneficial effect on the local economy. However we do need our local MPs to lobby government to focus on policies which will create a business environment for our Norfolk companies to invest and grow”

The survey results show the following:

Business confidence and investment falls: The survey showed worsening confidence and investment levels from both manufacturing and services firms. For both sectors levels are lower than long-term historical averages, and have not yet recovered to levels seen before the recession. Fewer firms are looking to invest in training and plant & machinery, and confidence in future turnover and profit has fallen to levels last seen at the end of 2011. However the Norfolk manufacturing and services sectors both reflected an overall higher level of confidence than shown at both a regional and national level. Both sectors showed an increase in their confidence in turnover of 10 points, with manufacturing now showing a balance of 38% and the service sector showing a balance of 28%.

Encouraging Norfolk export results: The Norfolk manufacturers showed mixed results, with exports sales dropping from the last quarter, although future orders increased. Meanwhile the Norfolk service sector continued to increase both their export sales and their future orders. However, the national picture showed their export recovery has weakened. Previous surveys this year had shown strong results for exporters in both sectors. While balances are still positive indicating growth, this quarter they fell to levels similar to Q4 2011, meaning export growth this year, has dropped back.

Norfolk increases future domestic orders: Nationally, the balances measuring domestic activity have fallen on the previous quarter. In both manufacturing and services, balances for domestic orders for the last three months have fallen. More worryingly, the results point towards a contraction in the future, with the national forward-looking home orders balances in negative territory. Conversely, both the Norfolk sectors bucked the trend and showed an increased balance for future domestic orders, despite current orders showing a downturn. The domestic balances nationally are higher than those seen in 2008 and 2009 during the recession. However, they remain lower than their long-term historical averages, and far below pre-recession levels.

Firms less confident in taking on staff: The figures measuring whether firms have or are likely to take on new staff have also fallen in the last quarter. Asked whether they had taken on staff in the last few months, the balance of Norfolk manufacturing firms hiring fell very slightly by +1%. This is a much better result than the national figure which fell by +11%. The Norfolk service firms, although showing better results than national, declined by two points to +20%, similarly the national service sector balance fell by 3 points to +9%.

Companies reported cashflow problems: The service sector balances measuring cashflow (the movement of cash in an out of a business) for the UK and Norfolk remain weak, and were in negative territory. Exceeding expectations, the Norfolk manufacturers, having been in negative territory since Q1 2012, increased their balance by 16 points to +5%.

Commenting on the results, John Longworth, Director General of the BCC, said: “Economic growth is weak and businesses are less confident and less likely to invest than they were at the beginning of the year. The BCC’s survey results should be a clear signal to government that more needs to be done to stimulate growth alongside continued deficit reduction. Despite official estimates, we believe the economy is still growing, but it is slowing. We need immediate measures now to support confidence and investment, a radical long-term growth plan, and a continued commitment to deficit reduction.

Domestic austerity and the eurozone crisis have dented confidence. In addition, business concerns around access to finance are also undermining the rebalancing of the economy towards exports. Businesses need to know that the government is taking decisive action to get the economy growing. They also need advice and support to be able to grow. The BCC has proposed a Growth Voucher scheme offering 20,000 small businesses £5,000 worth of advice to jump start investment and expansion plans. We need to encourage businesses to look to new markets, develop new products and invest, by boosting confidence and creating a positive cycle of growth.

Ahead of his Autumn Statement, the Chancellor will need to consider other measures to move Britain towards a new model economy. That means implementing plans to create a British Business Bank, and far-reaching proposals to unlock infrastructure investment and special capital allowances that encourage companies to invest.”

David Kern, BCC Chief Economist, said: “The Q3 2012 results confirm that UK economic performance remains weak and inadequate. While the official ONS assessment that the UK was in technical recession for three consecutive quarters is still too gloomy in our view, it is clear that the economy has been stagnant for too long, and urgent measures are needed to enable businesses to drive a sustainable recovery. Though most key Q3 balances are weaker than in Q2, our results could still signal a return to positive GDP growth in Q3. This is because our Q2 survey pointed to a stronger economy than the ONS suggested. Also, our members’ replies have probably given a smaller weight than the ONS to temporary distortions due to the impact of the Diamond Jubilee on the number of working days. Starting from the ONS estimate that GDP fell by 0.4% in Q2 2012, we expect positive quarterly growth of 0.5% in Q3 2012.

The job of repairing Britain’s public finances will take longer to complete than initially planned. But, if the Chancellor demonstrates firm commitment to a credible fiscal plan, additional spending policies aimed at creating growth will help preserve market credibility. Overcoming the impediments dampening economic growth will be difficult and will take time, but we are confident we can get there. However, until excessive debt levels are reduced much further, businesses and consumers will have to accept a prolonged period of relatively low growth.”

Norfolk Chamber, through its linkage to the British Chambers of Commerce, is pleased to be able to offer Accredited Training Courses covering International Trade from January 2013.

The British Chambers of Commerce (BCC) is playing a leading role in the Government’s Get Britain Exporting agenda by launching a new National Trade Skills Training programme.

The ‘core 6’ course set will be accredited by the BCC and offered through the Chamber Network as a family of short courses. The courses are individually and collectively relevant to SMEs who wish to improve the skills and competence of their staff.

Candidates achieving Pass or Merit in any of the courses will receive a uniquely numbered certificate in each area. Those who pass all six courses will achieve a nationally recognised Foundation Award in International Trade.

The training programme has been developed after demand from employers for a national skills experience for their staff. By developing a national solution to the exporting skills gap, the BCC is making a vital contribution to helping the government achieve its target of creating 100,000 new exporters.

These courses are suitable for both experienced exporters and those with no previous knowledge of exporting.

The 6 course titles are:

• Understanding Exports
• Methods of Payment
• Export Documentation
• Incoterms® 2010
• Letters of Credit
• Import Procedures

Using the unique international trade experience within the chamber network, the BCC identified these six core, one day courses that businesses need to be able to start exporting. Through a steering group of Chamber experts they developed an accreditation process to give employers confidence that those attending the course have gained relevant and applicable knowledge and that their competence has been assessed and verified enabling them to boost their businesses export drive.

The courses will continue to be delivered by our trusted, accredited trainer Mike Strawson, who has been working with us for many years. Those of you who have attended our courses will know that Mike has an incredible knack of delivering the content in such a crystal clear manner, delegates walk away with a sound understanding of the subject. Mike has in fact, played an instrumental part in writing the new Accredited Courses for the BCC, and they are very similar to our existing ones.

For more information on these courses, please see our flyer or contact the International Trade Team on 01603 729712, email [email protected]

Members of the Great Yarmouth Chamber Council met with Brandon Lewis, MP this week, to discuss issues affecting the local economy in Great Yarmouth.

A key prospect in this region is the offshore energy sector. Businesses in Great Yarmouth and down the coast to Lowestoft have a fantastic opportunity to get involved in the development of the offshore wind industry. This sector of the energy industry could provide both jobs and prosperity in Norfolk and Suffolk for the foreseeable future, with the East Anglia Array, the largest offshore wind farm, being situated only 14km off the East Coast. However the project is being held up, due to uncertainty surrounding the Energy Bill.

The Chambers and Brandon Lewis are arranging a meeting with John Hayes, the Energy Minister to explain the situation from a business point of view and the need for a discussion on the best way forward to allow the wind farm developers to conclude their investment in the East Anglia Offshore array and help kick start the offshore opportunities for this region.

Topics also discussed with Brandon Lewis were the new business bank, the Enterprise Zone, the third river crossing and cutting red tape.

At a recent meeting of the West Norfolk Chamber Council the members were given updates from both the Leader and the Chief Executive of King’s Lynn & West Norfolk Borough Council.

Nick Daubney, Leader of the Council, advised the members of the latest information on the proposed incinerator project, which has now been ‘called-in’ by the Secretary of State. Ray Harding, Chief Executive provided an update on how the Borough Council were proposing to resolve the availability of parking in and around King’s Lynn. He also advised that they were starting to work on planning the budget for 2015/2016.

As part of the economic round table discussion, Heather Garrod, President of West Norfolk Chamber highlighted that she was working to get the business community more involved with the local schools and asked for support from both the Borough Council and West Norfolk businesses. Ben Colson, M.D. of Norfolk Green and chair of the Town Centre Partnership advised that the King’s Lynn’s Business Improvement District (BID) was progressing well and gathering momentum.

Ostap Paparega, the Regeneration and Economic Development Manager for the borough council also presented the proposed King’s Lynn Enterprise and Innovation Centre project, for which the New Anglia LEP has confirmed funding of £2.5m. The project will provide 25,000 sq.ft. of business innovation, office space and business support.

Nick Daubney, together with the Mayor of West Norfolk, Cllr. Geoffrey Wareham, opened the Chamber’s Meet the Buyer event on 20th September. The event was held at the Knights Hill Hotel, King’s Lynn and was well attended. Among the buyers were Bernard Matthews, Bespak Europe Ltd, RAF Lakenheath and Norfolk & Suffolk NHS Foundation Trust.

The attached PDF provides an update from the Highways Agency on the progress to the A11, Fiveways to Thetford improvements. More information on the scheme can be found on the Highways Agency’s website:

www.highways.gov.uk/roads/projects/4248.aspx.

– Public sector net borrowing was £14.4bn in August 2012, equal to the net borrowing in August 2011

Commenting on the public sector finance figures for August 2012, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The deficit in August was slightly smaller than the markets expected. But taking the entire period from April to August 2012 and removing the effect of one-off transactions, total borrowing so far this financial year was almost £13bn higher than in the same period in 2011. Unless present trends are reversed in the next few months, we now expect total borrowing in 2012/13 as a whole to exceed the total predicted by the OBR at the time of the Budget by more than £20bn. This situation is worrying, and is largely due to the continued stagnation in economic activity.

“To maintain credibility, the government should persevere with a realistic plan to reduce the deficit, but if persistently weak growth causes borrowing to overshoot, the UK’s credit rating may be endangered. Given these difficult circumstances, it is important to continue with spending cuts in areas such as welfare, pensions and the size of the civil service. These cuts should be supplemented with policies to boost growth such as more infrastructure spending, a reduction in NICs and support for business lending. Such measures will stimulate the productive potential of the economy and help businesses to create jobs.

“As long as the Chancellor can persuade the financial markets that he is determined to tackle the deficit, he should be able to preserve confidence and avoid threatening the UK’s credit rating.”

The vouchers worth £5,000 would be offered to businesses, and allow them to access advice to help them grow. Advice would focus on issues such as exporting, HR, access to finance, marketing, and help with the planning system. The scheme would generate activity in the domestic business services market, boosting business investment and the productivity and growth potential of small and medium-sized businesses.

Growth Vouchers would offer significant benefits not only to participating companies, but to a wide array of UK-based suppliers, particularly in the business services sector. Businesses applying for the scheme would need a demonstrable business growth plan. Vouchers could only be spent on gaining advice, rather than to boost working capital, and would have a time-limit on their use. The £100m cost of the scheme could be found from other business support programmes, for example future rounds of the Regional Growth Fund.

Advice could be focused on the following areas:

1) Legal, HR, accounting advice: As businesses expand, accounting and HR systems become more complex, and small businesses in particular can struggle to make sense of employment law and tax systems. Advice would help businesses understand these complex functions, allowing them to be more efficient, and focus on growth. 2) Access to finance advice: Smaller, younger, and high-growth businesses often have more difficulty accessing finance than more established firms, and some are unaware of the options available outside traditional debt finance. Advice could also address the problem of discouraged demand, and may result in more businesses obtaining finance to boost investment plans. 3) Marketing advice and training: Helping businesses with marketing their products and services here and importantly in overseas markets could lead to more sales, and growth opportunities for many firms. 4) Planning support: The complexity of the planning system means many businesses need to hire in external consultants at a high cost. The costs will often put firms off expansion, so offering companies free advice would help motivate businesses to grow and expand their premises. 5) Staff training: Workforce skills consistently rank among the top three concerns among Chamber members across the country. As businesses expand and develop their goods and services, increased staff training is often needed to help firms grow. 6) Export advice: Urgent action is needed to support the UK’s potential and current exporters to help rebalance the UK economy towards exports. Many businesses do not have the advice or skills they need to break into new markets. Export training and access to market intelligence and trade shows and missions, could help many businesses take the first step to exporting, and open new markets for current exporters.

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

“Businesses across the country are looking to the government to give the economy the boost it needs. A Growth Voucher scheme, targeted at those businesses with clear plans to expand, could help to increase productivity, business investment and growth. Government-led schemes have previously focused on pushing out what Whitehall thinks is the answer to businesses’ problems, rather than what businesses themselves say they need. This proposed scheme is based on evidence from our members, who tell us that help with the planning system, advice on access to finance and exporting, training staff, and marketing, HR and accounting support, would help them grow. ‘It’s time for the government to make sure support gets to the front line quickly, and prompts more companies to invest and take risk. Boosting business growth and investment through a voucher scheme would stimulate swift business investment, which in turn can lead to growth in the months and years ahead.”

The Export Control Organisation (ECO) is the UK’s regulatory ‘strategic’ export licensing authority and forms part of the UK’s Department for Business.

Recent Notices that they have issued to all Exporters, can be found below:

Notice 2012/41 A new cross-government website known as GOV.UK will be released this October. The site will be the new home for government services and information online, including export control content.

Notice 2012/42 As part of the Government’s export control Service Improvement Project (SIP), the ECO intends to improve the process of applying for OIEL’s.

Notice 2012/43 King’s College’s Centre for Science & Security Studies (CSSS) is holding two further seminars on export compliance and non-proliferation which are specifically aimed at the nuclear and electronics industry respectively. Notice 2012/44 The ECO has introduced new export licensing controls on the export to the United States of the drug propofol, which could potentially be used to execute prisoners on death row by lethal injection. Notice 2012/45 An update to the earlier released Notice 2012/41 relating to the new UK Government website. Notice 2012/46 The European Union (EU) has announced a number of revised sanctions measures against Belarus, Eritrea, Iran, Somalia and Syria. These measures were published via a number of different Council Decisions and Council Implementing Regulations on both 15 and 16 October 2012 (published in the EU Official Journal).

For general export control queries please contact the ECO Helpline on 020 7215 4594 or mailto: [email protected]

• Six in ten businesses (59%) tell BCC that they would feel more confident in securing finance if Britain had a government-backed business bank or finance agency
• Announcement of £1bn funding by Vince Cable an important step in journey toward a fully-fledged British Business Bank
• Significant achievement for BCC campaign for creation of a business bank similar to those in other countries

Responding to the news that Vince Cable will announce a £1bn government commitment toward the creation of a business bank, Caroline Williams CEO Norfolk Chamber of Commerce, said:

“The government has taken a decisive step toward the creation of a British Business Bank by committing real money to get it off the ground.

“We are pleased that ministers are heeding the Chamber Network’s call to create a business bank that goes well beyond a re-badging of existing schemes. The funding announced by Vince Cable is the first step in a journey toward a British Business Bank that enables new and growing companies to get access to capital in the same way that they do in Germany, South Korea, and the USA.

“Six in ten Chamber members*, including those from Norfolk, told us just last week that they would feel more confident in securing finance if Britain had a government-backed business bank. So many companies will be encouraged by today’s news.

“However, there are a number of challenges that need to be addressed to ensure the business bank can support the real economy. At least initially, the business bank will have to work through existing lenders, which could put off some companies who still do not believe that the high-street banks will help them access the capital they need to grow. We also need to better understand how taxpayers’ cash will be used to unlock additional funds for business lending from the markets. And given the fact that growing companies need access to capital for the long term, the funding announced today must be the first, not the last, sum destined to support business lending at this new institution.”

Commenting on yesterday’s announcement on the independent scrutiny of regulations affecting challenger businesses by Business and Enterprise Minister Michael Fallon, Caroline Williams, CEO Norfolk Chamber of Commerce said:

“Ensuring that innovative, growing businesses are not hampered by burdensome red tape is a step in the right direction. Independent scrutiny of outdated regulations is vital if we are to help ground-breaking companies in Norfolk thrive. The Norfolk Chamber supports the call for the role of the independent Regulatory Policy Committee to be strengthened, to ensure regulations that hamper business growth are fully analysed.

“These changes must, however, form part of a wider deregulation package that reduces the burden of red tape for all companies. Only significant deregulation, both domestically and in Europe, will give businesses the confidence to grow, innovate and create employment in the long-term.”