Chamber News

Commenting on the Office for National Statistics inflation figures for June 2022, Nova Fairbank, CEO for Norfolk Chambers, said:  “The rise in Consumer Prices Index inflation to 10.1% is the tenth monthly increase in a row and another record high. “This higher than expected inflation increase, alongside eye-watering energy prices, confirms the severity of the cost of doing business crisis.   “This squeeze on businesses’ operating costs is also reflected in the latest Producer Price Inflation figures which show a 22.6% rise in the year to July 2022, which remains among the highest levels since records began in 1985. “The difference between input and output inflation illustrates that many firms are absorbing as much of these additional costs as they can. There is a limit to how much additional cost firms can absorb and is limiting growth and investment. “Our research shows that two out of three firms expect to raise their own prices in the coming months, with utilities, labour costs, and raw materials all cited as the main drivers of costs. Firms have been telling us about this inflation shock for 18 months now. “Businesses want to support their people, they want to invest and grow and they don’t want to put prices up for their customers, but they are left with little choice. “The Government should act and has levers to pull to give vital support to businesses now. “The two immediate and impactful choices would be to review and reform the Shortage Occupations List to help fill the 1.3 million job vacancies; and bring businesses’ energy costs down by lowering the VAT rate from 20% to 5%.  “It’s time for action and we’re offering solutions. It’s time for Government to listen.” More information on the ONS inflation data can be found here.

The arrival of the summer recess marks a respite period for many (other than Conservative Party leadership candidates and members) from an intense period of policy-making affecting trade. As a new Prime Minister takes office on 6 September, the in-tray on international trade issues will be daunting. Firstly, the prospect of a fully-fledged trade dispute between the UK and the EU is drawing ever closer. The Northern Ireland Protocol Bill completed its Commons stages this week, and was introduced into the House of Lords yesterday. This provides UK Ministers with the legal powers domestically to over-write the Protocol and introduce check free, friction free movements of goods East-West and West-East across the Irish Sea for Great Britain and Northern Ireland. The European Commission is expected to launch new legal proceedings against the UK Government within days for alleged breaches of the Withdrawal Agreement. Should the Bill become law – a prospect still many months away – the EU is expected to respond with further actions including safeguard measures (tariffs) on selected UK exports to the EU while the whole matter is resolved by the dispute resolution machinery in the Withdrawal Agreement and Trade and Co-operation Agreement. The BCC is prioritising a negotiated solution, but potentially affected companies should be taking advice now to mitigate their exposure to new costs on exporting goods to the EU should matters worsen. Second, the UK Government launched its consultation document yesterday on a Single Trade Window (STW) which is designed to be rolled out from December 2023 as part of the new Target Operating Model (TOM). This will incorporate border control processes for goods entering GB from the EU and the rest of the world, including those inbound measures which were deferred from entering into force in the latter half of 2022 (requirements for safety and security certificates, export health certificates, and documentary, identity and physical checks on products of animal origin and plant. products). In time, the STW is designed to provide a single user portal for a range of border and customs processes and greater efficiency in holding times for goods. A range of other countries are also progressing their Single Customs Window plans too, including the EU. Third, an autumn campaign on preference utilisation rates among SMEs is being prepared for roll out. The BCC is involved in discussions with the UK Government about outputs and delivery of this, following our research findings from members that awareness and ways to use new trade agreements being made by the UK with other trading partners was very low. The aim is to increase volumes of exports and numbers of companies exporting. Initially five markets will be prioritised: Australia, New Zealand, Singapore, Japan and Norway. The Australia and New Zealand free trade agreements are expected to be ratified later in the autumn and take effect early next year after legislation at Westminster on procurement and amendments to the tariff schedule are passed. Fourth, an intensive series of negotiating rounds will be required to complete some and progress other key trade negotiations. Negotiations with India are expected to be completed in time for 24 October – the BCC has had sight of some negotiating drafts in key areas. Canada negotiations for a bespoke trade agreement are expected to conclude by the end of the year to tie-in with UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Negotiations with the Gulf Co-operation Council, Mexico and Israel are getting underway but may not finish into 2023. Fifth, delivering an export strategy which provides a pathway to stronger export-led growth will be key this year. The Office for Budget Responsibility forecast in last autumn’s Budget export growth between 8-9% this year. Trade data from the first half of this year puts UK export performance short of that growth trajectory. The BCC is putting plans to DIT to remedy that and boost export volumes. So a busy autumn ahead, as well as unpredictable events such as the impact of the war in Ukraine on supply chains. Keep in touch with ChamberCustoms and the BCC as we guide you through this uncertain period and reach together better times ahead. Have your say. Let us know your opinions Photo credit: Chamber Canva Pro   You can view this original article here on the BCC website

Commenting on the latest ONS Labour Market statistics released today, BCC Head of People Policy, Jane Gratton, said: 

“The labour market remains incredibly tight adding to the growing list of concerns businesses are facing. This is a ticking timebomb for firms up and down the country.

“Today’s figures show little improvement for employers over the last quarter. Despite the small increase in employment levels, the number of job vacancies in the economy remains around the highest on record. Competition for skills and labour continues to drive up wage costs.”

“Skills and labour shortages have reached crisis point for many firms. The impact is being felt on their ability to meet customer demand and forcing some to turn away new business, because they simply do not have the human resource. This is restricting growth and business confidence. It’s a serious and urgent problem.

“On top of all of this, firms are now grappling with the highest inflation in almost 40 years; the largest spike in interest rates in three decades; ongoing supply chain disruption; and eye watering energy bills. There is a limit to how much additional cost business can absorb.

“The Government can help ease the growing pressure in the labour market at no extra cost to the Exchequer.  We need an immediate review and reform of the Shortage Occupations List (SOL) to include more jobs at all skill levels.  This will give firms breathing space to train and upskill their workforce. We have over a million more job vacancies than people available to work, so the sooner we start the SOL review, the better.

“We also need to encourage economically inactive people back into the UK labour market through access to publicly funded rapid retraining opportunities.  Businesses must be part of the solution too by creating the right workplace conditions, for example by providing flexible working practises, training opportunities and a focus on workplace healthcare and support.

“We cannot see another month of the same old news, it’s time for action and we’re offering the solution. It’s time for the Government to listen.”

The outlook for global trade remains weak for 2022, according to a new study published this week by the UN Conference on Trade and Development. The report finds that although trade values are continuing to rise (partly down to inflation-led price rises), trade volumes are almost stagnant. An update on live and forthcoming UK trade negotiations: CPTPP (11-strong nation block in Asia-Pacific) accession – set to be completed by the end of 2022. India – high-level deadline set for 24 October 2022 for completion of negotiations. Canada (upgrading the continuity agreement) – have commenced, due to be completed by end of 2022. Mexico (upgrading the continuity agreement) – have commenced – no deadline for completion. Gulf Co-operation Council (Saudi Arabia, Qatar, Kuwait, UAE, Bahrain, Oman) – first round taking place this month. Israel (upgrading the continuity agreement) – negotiations launched, likely to get underway in coming weeks. Switzerland (upgrading the continuity agreement) – likely to get underway in the autumn. Future negotiations: South Korea (upgrading the continuity agreement). Australia and New Zealand agreements on track for ratification before end of 2022 and entry into force early next year. If you need support trading across the world please get in touch with our International Trade team here. Image credit: Chambers Canva Pro 2022

HMRC is closing its Customs Handling of Import and Export Freight (CHIEF) system on 31st March 2023.

• From 30^th September 2022, all import declarations will be declared on CDS
• From 31^st March 2023, all export declarations will be declared on CDS

Some differences:

• It is essential that you use the correct tariff. The code lists are not the same for CHIEF and CDS, the declarant must select the correct code, or the declaration will fail.
• In CDS most data elements are restricted to code format (other than name and address fields) which is different from CHIEF which accepted data in a free text format.
• A new dashboard to monitor and manage declarations
• More detailed customs information is required

“Registering takes time so businesses should start moving to the Customs Declaration Service to ensure a smooth transition and avoid disruption to their business.” says Government Department. To access CDS you will need a Government Gateway account. Most businesses will have an account already to access for tax purposes and this can be used to access CDS. HMRC has also now automatically registered EORIs on CDS. Find out more on the new requirements for CDS

Andrea, one of our account managers visited Teknomek’s factory on the 4th of August. “Yesterday I had the pleasure of having a tour around our member Teknomek’s factory. They have devised an amazing traffic light system in their factory which has increased their productivity massively. Teknomek make products out of stainless steel for food preparation businesses and they also work with pharmaceuticals and hospitals.  Due to the increase in productivity, they have freed up space in their workshop to enable them to bring in Adhoc work for other businesses. They are currently looking to insource work from manufacturers that use stainless steel as core components for their products that don’t have the capacity to fulfil their orders. For example, during the pandemic, they were making stainless steel hand sanitiser units for a client that couldn’t keep up with demand.” View Teknomek’s directory here Photo Credit: Teknomek

“This rise is the clearest signal yet of the Bank of England’s intention to get inflation under control. Spiralling prices are cited by businesses as by far and away the top concern right now. 

“However, given the extremely precarious state of the economy, this decision is not without risk for businesses and consumers that are exposed to banking or overdraft facilities. 

“There are many causes of the current inflation crisis – global supply chain problems, trade barriers, soaring energy costs, increased taxes, and labour market shortages. Interest rate rises alone will do little to address these. 

“Worryingly, our research indicates strongly that most small businesses are not investing for growth, and that longer-term confidence is beginning to wane.” 

The Bank of England’s Governor correctly highlighted in his recent Mansion House speech how the incredibly tight labour market is putting upward pressure on inflation. 

The BCC has written to the Government outlining a three-point plan on how it can work with businesses to solve these recruitment difficulties. 

The steps are: 

– Firms must be encouraged to find new ways of unlocking pools of talent – by investing more in training their workforce, adopting more flexible working practises and expanding use of apprenticeships;   

– Government must help employers invest in training by reducing the upfront costs on business and providing training related tax breaks; and   

-The Shortage Occupation List (SOL) must be reformed to allow sectors facing urgent demand for skills to get what they need.     

Our international expert Julie (the oracle) celebrated 21 years at the Norfolk Chambers on the 1st August. For the first 9 years Julie was administrator to the CEO and for the last 12 years, she has worked in the International Department. What Julie doesn’t know about International Trade, is not worth knowing! So you know where to come if you have an international question. Thank you Julie!

The Queen’s Awards for Enterprise are the most prestigious awards for businesses, recognising and celebrating business excellence across the UK. The winners of the awards demonstrate outstanding success in their respective fields of innovation, international trade, sustainable development and promoting opportunity (through social mobility). Her Majesty The Queen personally approves the winners and the Department for Business, Energy & Industrial Strategy publicly announces the winners on the 21st April each year. Winners often state that their achievement has opened new doors for them in terms of securing new contracts, venturing into new markets, and further developing their business. If successful in winning a Queen’s Award for Enterprise, the organisation receives a Grant of Appointment and is able to display the award emblem for up to 5 years, and access to a thriving alumni network of previous award winners! This year there were 232 Queen’s Award Winners. 2022 winners can be found here: https://www.thegazette.co.uk/queens-awards-enterprise-2022 This year’s winners include The Co-op, the World of Books, AES (solar panel pioneers) the 100-year-old family-run business Bettys and Taylors, and DSNM’s innovation which is the world’s only Cloud-based software to correct maritime charts in the interests of safer navigation. The Awards are open to all UK-based organisations with two or more employees. 90% of the winners are SMEs but big businesses like KPMG, Willmott Dixon, Holland and Barrett and JCB also recognise the importance and the benefits of these Awards. Now, more than ever is a vital time for great UK businesses to be celebrated and recognised. Applications are open now and close midday 6^th September. https://www.gov.uk/queens-awards-for-enterprise QA Leaflet 2023

• Percentage of UK businesses reporting increased export sales remains flat for the 5th quarter in a row at 29% 

• A quarter (25%) of exporters saw decreased sales, while 46% report no change 

• Concerns over manufacturing recovery as exporters report unprecedented cost pressures and inflation worries 

A survey of over 2,600 UK exporters has revealed that overseas sales growth has been effectively stagnant for more than a year since the economy fully reopened after lockdown. The BCC’s quarterly Trade Confidence Outlook for Q2 2022 showed the proportion of exporters reporting increased overseas sales to be unchanged from Q1 at 29%, while those reporting a decrease remained at 25%. This compares to around 40% of businesses consistently reporting increased domestic sales across the same time period in the BCC’s Quarterly Economic Survey (QES). Manufacturers trading overseas are under particular pressure, with only 39% expecting their profitability to increase in the next twelve months, compared to 48% of service sector exporters. This compares to 43% of all businesses surveyed in the QES. Manufacturing exporters are also the most likely (78%) to expect to raise prices in the next year, a record high. Almost nine out of 10 (89%) firms in this sector cite ‘raw materials’ as their biggest cost pressure, with 74% citing ‘utilities’ and 70% citing labour costs. Responding to the findings, Chief Executive Officer at the Norfolk Chambers, Nova Fairbank said: “The combination of supply chain disruption, soaring prices, and the impact of Brexit red tape and compliance costs has had a chilling effect on exports, especially for smaller firms already scarred by the pandemic. “Recent ONS figures have shown in increase in exports to the EU, driven in part by shortages caused by the war in Ukraine. But our data shows there are serious underlying issues – which are hitting smaller manufacturing exporters the hardest. “Any new Prime Minister must acknowledge the huge challenges being faced by our exporters – often the most dynamic, innovative and forward-thinking businesses in the UK economy. “Then Government must help businesses to harness the opportunities provided by existing free trade agreements, and those coming on stream. Far too many firms are either unaware of the possibilities or are uncertain how to take advantage. “Chambers of Commerce have the expertise and business network to help Government shift the dial. By working together, we can build an end-to-end support service for our exporters which could truly make a difference.”

Future Spaces was held on Thursday 21^st July, and hosted by Layrd Design at Norwich City Football Club. The event was all about exploring sustainability and wellness in interior spaces. The event started with networking with a selection of drinks and plant-based canapes offered to the attendees followed by an introduction to the event by Will Mayes from Layrd Design. The first speaker was Ruscha Fields from The Good Plant Company. Ruscha talked about biophilic design and how to successfully incorporate planting within the workplace. Ruscha stated that having plants present makes us feel connected to nature and the environment ultimately making us feel relaxed and calmer. Having plants in the workplace has been proven to enhance wellbeing and increase productivity. If you are worried about the upkeep of having numerous plants around the office then why not get artificial plants, these give off the same positive effect as real plants. Ruscha was also involved in the Moss workshop which took place after her talk. Here attendees built their own moss frame which they could take home and put in their office. After a short break, Michael Aastrup from Tarkett talked about their company’s approach to sustainability. Tarkett is the 3^rd largest flooring company in the world, and they have now taken the approach of putting sustainability first ahead of design and functionality. Tarkett recycle old carpets and fishnets for yarn and even acquire the film from car windscreens to use in their products. Michael stated how committed Tarkett is to better living spaces and promoting healthy indoor environments, one way they show this is with their unique dust capture system in their carpets. The last speaker to finish the event was Nathan Huxley from Orange Box. Nathan spoke to us about the importance of being/working together and creating spaces people want to be in. He spoke to us about the idea of relationship buildings “where the ‘office’ is no longer the health problem, it’s the wellness solution”. The top of the terrace, where the event was held was kitted out with furniture from Orange box for everyone to try, which you can see below. A group favourite was their QT pod which provided privacy and comfort to work in. Future Spaces provided some interesting points businesses should consider around sustainability and wellbeing in the workplace, and how having a small plant on your desk can make a huge difference. Photo credits – Norfolk Chambers of Commerce https://www.layrddesign.co.uk/ https://thegoodplantcompany.com/ https://home.tarkett.co.uk/en_GB/ https://www.orangebox.com/ Speakers:

• Will Mayes
• Ruscha Fields 
• Michael Aastrup 
• Nathan Hurley 

We’re all now familiar with the cost of living crisis – how households are struggling to keep up with bills and afford the rapidly rising cost of food, fuel and other essentials. But there’s another crisis which is dramatically hitting businesses, and that’s the ‘cost of doing business’ crisis.  Firms across the country are being confronted by rapidly rising costs of vital raw materials, fuel, wages and, of course, energy. Battered businesses now face a stark choice – whether to pass on the increases to their customers, or to try and absorb these new expenses to keep prices down. In order to cope with these dramatic cost increases, firms need to get a grip on their expenditure.   Installing a smart meter is a positive step in taking control of business outgoings.  Once installed, energy readings will be sent directly to the supplier, bringing an end to estimated bills. Firms with 10 employees or less could be eligible for a smart meter.  To find out more please click here. You can also contact your energy supplier or broker. Photo credit Smart Energy GB / BCC