Chamber News

The economic round table discussion, at a recent meeting of the Norwich Chamber Council, highlighted that business are still finding it tough, with many business playing safe and being cautious. However there are some signs of improvement. Broom Boats advised that they have orders for two new hire boats for next year and will be re-launching their own hire boats. WLP also advised that some of their clients are becoming more optimistic, particularly those who have managed to adapt to the changeable economic conditions.

The group also heard about the proposed plans for the former RAF Coltishall from Mike Britch, Group Managing Director, NPS Property Consultants. Mr Britch highlighted that 400 acres of the 600 acre site would be returned to agricultural use. Some of the remaining 200 acres would be used for allotments, self build and community projects, whilst the rest would be for commercial use, which could include options for storage facilities, manufacturing etc. The heritage of the site would also be preserved and Mr Britch confirmed that once details had been finalised, business open days would be held to launch the site, possibly in October

The Bank of England Agents’ summary for September highlighted that spending on consumer goods and services continued to grow at a gradual pace, however promotions and sales remained essential to support demand, with households still focused on finding value for money.

Export growth continued to slow, reflecting the weakening conditions throughout the Euro area and manufacturing growth continued to slow. However turnover in the service sector was now rising a t a gradual pace. To read the full report click here.

Norfolk Chamber and other key stakeholders will be attending the Norfolk Rail Prospectus Workshop, organised by Graham Plant, Cabinet Member for Planning and Transportation and Chloe Smith Norwich North MP, in conjunction with Norfolk County Council on 4th October.

The Prospectus will build on the tremendously successful region-wide prospectus that Local Enterprise Partnerships – backed by local authorities, the rail industry, the Chambers and MPs – delivered to Westminster earlier in the summer.

We are already seeing the results of this. The recent government announcement about rail spending and overarching objectives for the next five years included positive announcements about improving the rail network at Ely, for example, which is vitally important for a number of services including Norwich to Cambridge and King’s Lynn to Cambridge.

Now that the rail industry is developing its detailed spending programmes, and government is renewing the franchises covering the county, we have to follow this up with our detailed requirements.

There will be an opportunity for the business community to reconfirm what is needed on the railways for Norfolk. There is strong backing for ‘Norwich in Ninety’ and half hourly services to King’s Lynn. The workshop will aim to find out what is important elsewhere, and in more detail, to make sure that the railways can meet the needs of Norfolk: to build our economic strengths and capitalise on what the county has to offer.

The Prospectus is for the long term, and the stakeholders seek to maintain a unified, passionate and focused campaign which best positions us at the right time.

Commenting on the MPC minutes published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The decision to hold interest rates at 0.5% and to maintain QE at £375bn was taken unanimously, which was unsurprising. Existing QE is still being implemented, so it is understandable that the MPC wants to wait before another increase. However, the minutes reveal that some members think further stimulus will be needed, and the financial markets are expecting a QE increase around November time.

“Recent measures by the ECB, the US Fed and the Bank of Japan will probably reinforce pressures for an increase. But we still think the MPC should be cautious and refrain from adding to QE unless the UK financial system faces new threats due to developments in the eurozone. It is important that additional QE is not used to limit falls in inflation over the next year, as a temporary fall below the 2% target would support demand.

“Although QE was helpful in the early stages of the 2008/09 financial crisis, its benefits have diminished in recent years, mainly because the scheme has focused exclusively on purchasing gilts. A recovery in business lending will only be achieved if the MPC and the government relies on tools other than conventional QE. The Funding for Lending scheme could be effective, but the MPC could help by purchasing assets other than gilts, including securitised business loans. To ensure credit is reaching new and growing companies, the government should be moving towards the early creation of a state backed business bank.”

The British Chambers of Commerce are carrying out a snap poll on “Access to Finance” this week.

The Snap poll is carried out over 3 days and starting from today, closing at midnight on Thursday.

The BCC have commented as follows:

“Considering the continuing economic challenges faced by UK businesses, we would like to quickly capture your views on how access to finance is shaping the current business environment.

Conducting this very short snap poll of Chamber members will enable us to represent the needs of business as effectively as possible at a time when major changes to the business finance system are being considered both here in the UK and globally.”

Please click hereto take part.

Please remember that the poll will end at midnight on Thursday (20 September).

• Annual CPI inflation was 2.5% in August 2012, down from 2.6% in July
• Annual RPI inflation was 2.9% in August 2012, down from 3.2% in July

Commenting on the inflation figures for August 2012 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The fall in inflation in August was widely expected, following setbacks in July. Current trends suggest that inflation will be down to 2% at the end of the year, and will fall slightly below the target during 2013. There are risks however, that oil and food prices may rise in the coming months, which may put upward pressure on inflation again. Falling inflation benefits the UK economy as it reduces the squeeze on businesses and consumers and underpins domestic demand.

“Since UK inflation has been above the 2% target for prolonged periods in recent years, a temporary fall below this next year should not be a cause for concern. With this in mind, we still believe that the Bank of England should not use additional QE to limit falls in inflation. Instead, the MPC and the government should concentrate on measures that will directly boost bank lending. This can be done through the Funding for Lending scheme and more significantly, through the early creation of a business bank.”

Commenting on the proposals announced by Vince Cable on the proposed employment law changes, Caroline Williams CEO Norfolk Chamber said:

“Norfolk employers will be encouraged that the government is taking steps to reduce the burden of the employment system and create a more flexible labour market. Dismissal is always a last resort, but is at times necessary to protect a business and other members of staff. The fear of malicious tribunal claims and an unnecessarily antagonistic dismissal process has a chilling effect on employment. We would urge the government to move swiftly from consultation to implementation on settlement agreements and lower tribunal awards, as these proposals will boost confidence when businesses on the ground can see them in action.

On settlement agreements:

“In those unfortunate circumstances when businesses have to end the employment relationship, settlement agreements provide a speedy and consensual way to avoid disputes. Companies need to be confident that they can offer an employee a settlement to end the relationship without fear of future claims. We support moves by the government to make the process of offering a settlement easier to navigate without paying for specialist advice.”

On limiting tribunal awards:

“The current maximum award for unfair dismissal vastly exceeds the reality of most cases, but prevents many employers from seeking justice, and puts many more off hiring all together. The upper limit should be reduced and this would significantly increase employers’ confidence to challenge unmeritorious claims and recruit more staff.”

On tribunal reforms:

“These measures form part of a broader government agenda to reform the tribunal system and ensure it becomes less of a barrier to employment and economic prosperity. Although employers have welcomed efforts to deter vexatious claims by introducing fees for claimants, that policy will be undermined if the system of remissions means that just a quarter have to pay the full fee. The government must get a grip and ensure that all those who can afford the fee are made to pay.”

On additional changes needed to boost employment and confidence:

“These measures will boost employers’ confidence and lead them to create additional jobs, but will be undermined by upcoming government proposals on extending the right to request flexible working and shared parental leave. Extending the right to request to all workers will make it more difficult for employers to accommodate requests from those with caring duties. Similarly while we support the objective of helping mothers who want to return to work to do so, we are yet to see proposals on flexible parental leave that are workable.”

The UK’s aviation policy is under wide-ranging scrutiny at the moment, with attention variously on the desirability, or otherwise, of extending Heathrow and the possibility of creating a “Boris island” airport in the Thames.

The Director General of the British Chambers of Commerce (BCC), John Longworth, has widened the argument by suggesting that Stansted Airport can play an important role in boosting international trade and connectivity in support of British business.

On a recent visit to the UK’s fourth busiest airport, he met Stansted’s Managing Director, Nick Barton, to discuss a range of issues affecting aviation and business competitiveness, including aviation policy, infrastructure investment, export opportunities and access to finance.

He described Stansted as a superb airport with world-class infrastructure and noted that it has a burgeoning air freight market with significant spare capacity to take more flights, which would help to boost international trade.

“The UK desperately needs a coherent and comprehensive aviation policy for the short-, medium- and long-term,” Mr Longworth said. “Stansted clearly has a role to play.”

Mr Barton said that the airport had the permissions and facilities in place to serve 35 million passengers a year on its single runway and he was sure that it could help to build the international trade links that are vital for British business and prosperity.

A firm is facing a fine of £10,000 after it failed to inform HM Revenue and Customs (HMRC) that it had changed its name – despite the fact that all it had done was change from a partnership to a limited company.

The unnamed firm had, according to the Forum of Private Business (FPB), an exemplary VAT-paying record and had always submitted its tax returns on time.

What is more, the change of name did not affect its VAT number and HMRC did not lose out on any tax payments. The firm simply failed to tell the VAT authorities that it now had “ltd” after its name.

This meant it fell foul of VAT notification liabilities contained in the Finance Act 1985, and later the VAT Act 1994, and landed the company with a £30,000 fine – since reduced following interventions by accountants and the FPB.

The Forum’s Tax Adviser Andrew Needham said: “It is important that all small businesses are aware they could face steep fines unless HMRC is kept fully updated.”

However, he went on, this heavy-handed approach is the very opposite of the support that is desperately needed at this difficult time and HMRC risks further alienating firms hit by its disproportionate, targeted business records checks regime and widely-reported poor levels of service.

Chancellor George Osborne and Business Secretary Vince Cable have both announced that their Departments are considering the creation of a new bank to improve the flow of credit to small and medium-sized firms.

This comes as good news to the British Chambers of Commerce (BCC) which has long championed the idea and has now set out a detailed case for the establishment of a state-backed British Business Bank.

This argues that the Bank should be a clear “first port of call” for all viable companies seeking growth finance but should complement, not cannibalise, existing banks and other lenders, with commercial lenders having a “first right of refusal” on all applications received by the Business Bank.

The BCC suggests that its plan would particularly help dynamic and fast-growing companies, many of whom report difficulty accessing finance. It would also address “discouraged demand” among some existing bank customers.

The Chambers’ paper also notes that the Bank could help companies seeking mezzanine, export or supply-chain finance support, which it sees as being key to rebalancing the economy in the years to come.

Director of Policy and External Affairs, Dr Adam Marshall, said: “Our new report addresses many of the obstacles to the creation of a business bank, and shows that a new institution is both realistic and achievable. Ministers have a golden opportunity to pass enabling legislation for a business bank this autumn, and to dedicate their attention to ensuring that it is operational before the end of this Parliament.”

World trade is predicted to grow by 75% in the next 15 years, with merchandise trade volumes set to climb to US$48 trillion by 2025, up from US$27.2 trillion today.

That at least is the view of the International Chamber of Commerce (ICC), which is concerned that new financial solutions will be needed to enable corporates to maintain a resilient supply chain.

Accordingly, the ICC Banking Commission is organising its first-ever ICC Supply Chain Financing Conference, to be held in Paris on 4 and 5 October 2012.

Innovations in working capital solutions are more vital in today’s economic climate than they have ever been before, the ICC said, with companies and suppliers under conflicting pressures to improve payment terms, reduce prices and improve cash flow.

“From today’s emerging markets, new international powerhouses will arise to further drive world trade growth,” said Andre Casterman, Conference Co-Chair, Head of Banking and Trade Solutions, SWIFT and Co-Chair of the ICC Bank Payment Obligation (BPO) Project.

To support such growth in a volatile economic climate, he explained, new supply chain finance rules are being established. BPO rules, for example, offer a new instrument that combines the benefits of the letter of credit with those of open account trade.

The conference will combine educational sessions on different supply chain finance techniques while drawing on case studies and examples of best practice. Topics will be divided between invoice-based and purchase order-based supply chain finance techniques.

More details are available on the ICC website.

Jointly hosted by British Expertise and the British and Colombian Chamber of Commerce (B&CCC), a meeting to be held in London in October will explain why these organisations believe that the time is right to see Colombia as a market.

Those attending will hear the results of B&CCC’s newly completed research into the project opportunities created by the Colombian Government’s commitment to develop the country’s infrastructure, and will be provided with a copy of the report.

Carlos Sanchez, a lawyer with the firm of Duran & Osorio, will summarise the legal context of doing business in the fourth largest country in South America and will examine Colombian public-private partnership contracts and briefly describe how to take part in public procurement processes.

The meeting will be held at the London offices of British Expertise (10 Grosvenor Gardens) on 1 October at 3.30pm.

British Expertise is organising a UK infrastructure mission to visit Bogota and Cartagena from 19-23 November, to coincide with the Colombian Infrastructure Chamber Congress, the country’s largest infrastructure congress.

The October meeting will provide the background to the potential benefit of participating in the mission and will explain how, over the next eight years, Colombia will invest US$55 billion in its infrastructure, covering airports, ports, railways, hospitals, schools and roads.

Further details of the meeting, which is free to attend, can be found here.