Chamber News

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.

The Middle East Association, in partnership with the Saudi Committee for International Trade, warmly invites you to attend this year’s 9th Opportunity Arabia Seminar on Monday 1st October at One Great George Street, London SW1.

Opportunity Arabia 9 aims to introduce British companies to a thriving and growing market place and to raise their awareness of the limitless business opportunities that Saudi Arabia has to offer.

David Lloyd, Senior Consultant at the Middle East Association will be coming to speak at our “Spotlight on Saudi Arabia” event taking place on 5 March 2013.

Commenting on Vince Cable’s industrial strategy speech, Caroline Williams CEO Norfolk Chamber of Commerce, said:

“It appears that Vince Cable has listened to business’ plea for greater long-term thinking in policy-making, and has set out some sensible steps that could help to improve the business environment in the Norfolk. His proposals around industrial strategy make an important contribution to moving Britain toward a new model economy. A successful industrial strategy isn’t about picking winners or losers, but about creating the right environment for all businesses to thrive.

“While businesses will be heartened to hear strong support for the establishment of a business bank, this must be more than just a vehicle for existing government schemes. A brand new, fully-fledged business bank is needed to lend to new and growing companies, many of whom report difficulty accessing finance. Companies are clear, though, that nothing less than a ‘full service’ business bank will do – a rebranding exercise for existing government schemes or one that uses existing bank infrastructure is not enough. Businesses need policies that will help over the medium- and long-term, but boost confidence now. The government can do exactly that by addressing the problem of access to finance faced by so many of Norfolk’s firms.

“We have long said that the skills system is failing Norfolk businesses, with resources following the choices of individual learners, rather than the needs of business. The Employer Ownership pilots announced today are an important first step to ensuring that funding actually delivers the training that our companies need in order to grow. We support a further expansion of this approach, with employers having a greater say in how training funds are spent”.

• UK trade deficit in good and services was £1.5bn in July, compared with a deficit of £4.3bn in June

“The large decline in the July trade deficit more than reversed the setbacks recorded in June. Underlying export volumes rose in the last three months, while import volumes fell. We know that Norfolk exporters are facing major challenges due to problems in the eurozone and the global economy as a whole, so progress towards rebalancing will be slow and painful.

“However, the latest trade figures show encouraging progress, and reinforce our hope that the UK economy will return to positive growth in the third quarter of 2012. UK exports to non-EU countries were slightly higher than exports to the EU in the last three months, which shows a shift in the traditional pattern where exports to the EU are usually much stronger.

“These developments show that British including those from Norfolk exporters are making the right decisions and moving to faster-growing areas outside the EU. We have always stressed that exporting companies have huge untapped potential to expand, but need the right support to help them compete and break into new markets. We have developed a Global Market Place series of six seminars to assist Norfolk businesses to get into new markets and hear from industry experts. Firmer action from government in key areas such as trade finance, promotion and insurance would be a good start, but this needs to be part of a general shift in priorities towards more policies to boost growth.”

• UK trade deficit in good and services was £1.5bn in July, compared with a deficit of £4.3bn in June

Commenting on the trade figures for July 2012, published today by the ONS, Tracey Howard international Trade Director Norfolk Chamber of Commerce, said:

“The large decline in the July trade deficit more than reversed the setbacks recorded in June. Underlying export volumes rose in the last three months, while import volumes fell. We know that Norfolk exporters are facing major challenges due to problems in the eurozone and the global economy as a whole, so progress towards rebalancing will be slow and painful.

“However, the latest trade figures show encouraging progress, and reinforce our hope that the UK economy will return to positive growth in the third quarter of 2012. UK exports to non-EU countries were slightly higher than exports to the EU in the last three months, which shows a shift in the traditional pattern where exports to the EU are usually much stronger.

“These developments show that British including those from Norfolk exporters are making the right decisions and moving to faster-growing areas outside the EU. We have always stressed that exporting companies have huge untapped potential to expand, but need the right support to help them compete and break into new markets. We have developed a Global Market Place series of six seminars to assist Norfolk businesses to get into new markets and hear from industry experts. Firmer action from government in key areas such as trade finance, promotion and insurance would be a good start, but this needs to be part of a general shift in priorities towards more policies to boost growth.”

Representatives of the key Norfolk business groups (Norfolk Chamber, FSB, IoD, NWES, FIG, and the NFU) met with Chloe Smith, MP for Norwich North and Simon Wright, MP for Norwich South to highlight issues affecting local businesses. Among the topics for discussion was how to improve mobile phone coverage across Norfolk, an update on the newly formed federation, Transforming Education in Norfolk (TEN) and a progress report from New Anglia LEP on the Enterprise Zone in Great Yarmouth and their Going Places Fund.

(Photo courtesy of Marjorie Eade, FIG)

The UK petrol and diesel sector is being put under the microscope by the fair trading watchdog amid rising prices at the pumps.The Office of Fair Trading (OFT) will spend six weeks gathering evidence about whether competition is being curtailed. The watchdog will also consider whether falling costs of crude oil are reflected in prices paid by motorists.It will publish its findings in January.

The OFT said that the UK retail road fuels sector was estimated to be worth about £32bn.Petrol prices rose by 38% between June 2007 and June this year, and diesel prices went up by 43% over the same period.In June, the government announced it would postpone its 3p-a-litre rise in fuel duty from August until January.

‘Widespread concern’ The OFT said the review, which is not a full-scale investigation by the watchdog at this stage, would study whether the action of supermarkets and oil companies made it difficult for independent retailers to compete in the market.The review would also look into whether there was a lack of competition at the pumps in rural areas.

Claire Hart, of the OFT said“We are keenly aware of continuing widespread concern about the pump price of petrol and diesel and we have heard a number of different claims about how the market is operating.We have therefore decided to take a broad based look at this sector, to provide an opportunity for people to share their concerns and evidence with us.This will help us determine whether claims about competition problems are well-founded and whether any further action is warranted.”

A significant chunk of the price paid by consumers on petrol is tax, which will not be covered by the review. The Department for Transport has previously suggested that industry should come up with a voluntary code of conduct to ensure wholesale price falls were passed on within a fortnight to the motorist.

International concern The latest figures from Experian Catalist show that the average cost of a litre of unleaded was 138.99 pence on Tuesday. The average price of a litre of diesel was 143.52 pence.Earlier this year, the Retail Motor Industry Federation raised concerns with the OFT about the ability of independent traders to compete in the market.Similar concerns about prices at the pumps have led to investigations from regulators in Germany, Spain and Australia.

Commenting on the release of the independent SME Finance Monitor, Caroline Williams CEO Norfolk Chamber, said:

“The latest statistics from the SME Finance Monitor demonstrate that there are still serious obstacles for many companies seeking external finance. The figures strengthen the case for the creation of a British Business Bank, which would help address some of the problems in business lending.

“It is striking that the number of successful applications has fallen. Many companies still say they feel discouraged from applying or are put off by the process. Despite claims that financial institutions are open for business, only a minority of first-time applicants are being approved for loans and overdrafts by their banks.

“While it is good to see that most existing bank customers get the facilities they need when they ask for them, lenders’ low risk appetite means that too many young and fast-growing companies aren’t getting access to the capital they require. With companies less confident of a successful application for finance in the future, there is more to be done to restore relationships, improve transparency and rebuild trust between businesses and banks.

“The Norfolk Chamber’s Business and Finance group (BFG) which includes all the major banks repeatedly say that they are very much open for business and are willing for us to challenge them with any cases from our members who feel they are not getting a positive response. The BFG group are working on putting together an event which will pull together all types of finance opportunities to try to get more finance to the businesses who need it to grow”

The Department for Business, Innovation and Skills (BIS) has published the report of an independent review of apprenticeships and their accessibility to small and medium-sized enterprises (SMEs) by business owner and social entrepreneur Jason Holt.

The Education and Business Secretaries commissioned Mr Holt’s report in February 2012 to advise them on what more could be done to help SMEs take on apprentices. Drawing on his discussions with small firms, in this report Mr Holt identifies why the take-up of apprenticeships amongst SMEs is comparatively low. It goes on to review potential barriers and difficulties, and makes recommendations as to how SMEs can more easily offer apprenticeships and how to make apprenticeships more rewarding for SMEs.

Key measures include recommendations to:

• Work with the people that SMEs look to for advice, including lawyers and accountants, to promote apprenticeships to their SME customers.
• Enable SMEs to get their apprentices the training they need, by providing better information on availability and investigating how to give them a greater say in developing the skills they need.
• Improve the performance of providers of training to SMEs by agreeing standards and the consequences of not meeting them.
• Improve the Apprenticeship Grant for Employers by making it simpler and more accessible to more employers.

Business Secretary Vince Cable said: “Only a small minority of SMEs currently employ apprentices. Many of the rest are missing out on an effective way of growing and up-skilling their businesses. “We hope that the measures announced today will make a difference by raising awareness of the benefits of apprenticeships amongst SMEs and making it as easy as possible for these businesses to take on an apprentice.”

The Government has already taken a number of steps to help small companies recruit apprentices, including reducing the burden on training providers and employers by removing all health and safety requirements that go beyond what health and safety legislation demands, and establishing a dedicated Small Business Team within the National Apprenticeship Service providing a bespoke service to employers with fewer than 250 employees.

The full report of the Holt Review is available to download at the Department for Business, Innovation and Skills website

The economic round robin debate at the Norfolk Chamber Planning & Development Group meeting last night highlighted that the development, planning and construction sectors are quiet at present.

The Group are looking at ways to boost growth in Norfolk and want to build upon the success of their National Planning Policy Framework debate with the local authorities in July and continue to keep the dialogue going with the local authorities and their planners. They also want to establish good relationships with the utility companies, the Highways Agency and the Environment Agency. Jonathan Cage, M.D. of Create Consulting Engineers and the chair of the Chamber Planning & Development Group said “We are keen to engage with these organisations to establish what their perceived barriers are to bringing forward growth and to work together to boost the economy and growth in Norfolk.”

Matt Wood from the Lucas Hickman Smith Group presented his ‘white paper’ on ‘Self-Build Norfolk’ to the Chamber Planning & Development Group. He highlighted the opportunities and benefits of self build homes. It was discussed that if more homes in Norfolk were self builds, this would also benefit local building contractors, suppliers and architects who were involved in these projects.

The Planning & Development Group also welcomed the news that £3.5m has been made available by Norfolk County Council for groups such as parish councils, voluntary groups and charities to apply for funding for community projects i.e. sports facilities, play areas etc.