Chamber says employment figures paint mixed picture

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Niamh Corcoran, policy adviser, North East England Chamber of Commerce said:

“Figures released today offer a mixed picture of the North East’s labour market. The figures do show signs that the Government’s furlough scheme is effectively limiting job losses and stabilising the labour market. However, the statistics continue to expose the regional disparities in the pandemic’s economic impact, with the regional unemployment rate standing at 6.5%, significantly higher than the UK’s rate of 5.1%.

“The announcement of the roadmap out of lockdown restrictions yesterday offered much needed clarity for individuals in England. What was lacking, however, was guidance specifically for businesses around how they will be supported as we emerge from restrictions.

“In the Budget next week, the Chancellor must extend the furlough scheme according to the roadmap. Other forms of business support should also be made available to firms and sectors in line with the timeline laid out by the Prime Minister.

Today’s national statistics show that three-fifths of the fall in employees since the beginning of the pandemic were under 25. Clearly, young people are bearing the brunt of this crisis. In the Budget, the Government must deliver on its promises to protect young people and outline enhanced support for the under 25s, including an extension to the Kickstart scheme beyond December.

Chamber President discusses our Budget Submission

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Lesley Moody, President, North East England Chamber of Commerce said:

“The Chamber is the voice of the North East. My company, AES Digital Solutions, like many of our members joined the Chamber to ensure our views were heard at a local, regional and national level. Through the Chamber’s influence the region’s voice is heard by the Chancellor and it has never been more true that together we grow stronger.

“It is so important Government keeps its promise to level up our region and we will continue to hold their feet to the fire to ensure it happens. The country’s economy needs to be rebalanced to help tackle issues such as our high unemployment. I believe greater devolution would also help enable us to boost productivity and encourage growth. We could be far more effective as businesses and as a region if more decisions could be made on a local basis. It seems to me to be a ‘no brainer’ that greater freedom to solve problems, quickly and without unnecessary constraints would help us grow our regional economy”

Find out more about our budget submissions

Chamber calls on Chancellor to make levelling up a reality

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With a month to go until the Chancellor delivers the Budget on 3 March the North East England Chamber of Commerce has laid bare the challenges regional businesses face and what is needed to support them.  

In its Budget submission the Chamber highlighted the fact that the region has been under some of the most stringent and long-lasting Covid-related restrictions in the UK which had put huge strain on consumer facing sectors such as aviation, retail, leisure and hospitality.  It set out the expectation the Chancellor would maintain vital Covid support measures and also highlights a series of urgent issues that require investment including transport and broadband infrastructure.

Jonathan Walker, Chamber director of policy said: “Prior to the pandemic, the economic, wealth and wellbeing gaps between the North East and other parts of the country were unacceptable.  Covid-19 has only worsened this situation, with the Government’s stated goal of ‘levelling up’ regions such as ours never seeming so important and urgent.”

“This Budget must contain measures that will prevent unnecessary business failures and protect jobs until a recovery can be sustained.  We need to see significant extension of the Job Retention Scheme, with a tapered reduction of support as restrictions are lifted, an extension of business rates support and continued backing of Coronavirus loan schemes.

The Chamber letter said there should be rapid deployment of localised funding through councils for areas that remain in the highest Covid-related Tiers.  It also called for a full review of the range of Government support to ensure it no longer excludes large numbers of small businesses. 

Further demands include Government specifically mandating all departments and arm’s-length bodies to place rebalancing at the heart of their spending decisions.

The Chamber also stressed the importance of continuing talks with North East authorities about further devolution and the relocation of senior civil service roles to the region.

The regeneration of the region’s housing stock and refocussing of town centres are also Chamber priorities to support the North East’s position as a vibrant place to live and work.

The Chamber was established to support members’ international trade and the submission sets out urgent measures needed to ensure businesses are able to export to the EU easily and successfully following Brexit.

Jonathan Walker said: “Our mission is not just to repair the damage done to our economy in recent months. It is to come back stronger. We must correct historic unfairness, tackle inequalities and show the world our full capability. The right investment in our region by Government and businesses alike will deliver huge social and economic returns.”

Budget 2020, COVID-19 and the North East global outlook

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The Chamber released an initial statement shortly after Rishi Sunak delivered his first budget as Chancellor, in which we broadly welcomed many of the decisions taken, while being careful to add that for some pledges, the devil will be in the details. International Policy adviser Tom Kennedy takes a look at the last week in this blog post.

Set against the backdrop of the growing pandemic threat, the first Budget of the new Johnson government received much press attention for large increases in levels of investment and public spending, including £12bn worth of support to mitigate the economic shocks of COVID-19.

But what does this Budget specifically mean for our ambitions to make a more Global North East?

On the topic of international trade, the Chamber asked the Chancellor to commit extra finances and support for our region’s exporters, to make the most of global opportunities for trade after the EU exit transition phase comes to an end. In something of a win for the Chamber, these requests were met in the Budget with commitments made for an additional £2bn UK Exporting Finance (UKEF) and additional International Trade Advisers (ITAs) being based outside of London. UKEF is the UK’s export credit agency which provides loans and insurance from the government to support exporting enterprises; this money, if utilised efficiently, could be of great use to North East exporters.

The presence of more International Trade Advisers close to the North East can only be good for prospective exporters, or those currently exporting who want to break into new markets. More ITAs in the North East will hopefully allow for more identification of market barriers and support for businesses to overcome these barriers, or provide information on new markets for prospective exporters.

There were additional announcements for brand new developments for North East exporters, such as a ‘Trade Envoy for the North’, a Digital Trade Network in the Asia and Pacific region and the establishment of ‘local champions’ in key overseas ports to support exporters from UK regions including the Northern Powerhouse.

The establishment of connections in the Asia and Pacific region could be beneficial to enhance the already growing level of exports from the North East to non-EU nations, especially as the North East’s digital and tech sectors have been growing rapidly in recent years. On the other two proposals, it will be useful to see more detail on how they will work for North East businesses. It is unclear how these ‘local champions’ will operate in their areas, or how much influence they will actually be able to have in order to help trading relationships to foster and grow. In the same vein, there has been very little information on the trade envoy for the North and how it would operate. Hopefully this information will be made available in the coming months.

Considering how the B word has dominated politics for the past 3 and a half years, there was surprisingly little mention of Brexit in the Budget at all. The Chamber made clear in our letter to the Chancellor that the government should work tirelessly to secure a Brexit outcome that protects the free and frictionless trade with the EU that so many North East businesses rely on. As the negotiations are currently ongoing, it is perhaps not surprising that there was little mention of them in the Budget, but this absence of the issue in the Budget does provide other, perhaps concerning, questions for the region.

The figures, provided by the Office for Budget Responsibility (OBR) that guided the Budget and give the government a forecast for future British economic performance, did not include any calculations for the possible economic impacts of Brexit, or for Coronavirus, which is already having huge impacts on the global economy and on British businesses.

This not only casts the figures into doubt but could also have extra significance for the North East, considering that the government’s previous economic assessments of Britain’s departure from the EU have suggested that the North East will be the worst affected area, with an approximate 6% reduction in output, even under model Free Trade Agreement conditions.

This information, you would think, would be useful in preparing a Budget, so as to ensure that each region can be allocated resources that it may need before the transition comes to an end, yet this has not happened.

Another cause concern for the North East, was the lack of information on the UK Shared Prosperity Fund. There was no mention of the fund, other than that more information should be expected in the Autumn Comprehensive Spending Review.

The UK Shared Prosperity Fund is set to replace the European Structural Investment Fund that Britain currently receives from the EU following the end of the EU exit transition phase. Between 2014-2020, the North East Local Enterprise Partnership area was allocated £437 million from the fund, while the Tees Valley received £197m in the same period, so information on the replacement of this funding is needed as soon as possible.

With the transition period scheduled to end on 31 December, the questions over Brexit cannot continue to be pushed further down the road. Not mentioning or accounting for our departure from the EU and its ramifications in the Budget do not make these issues go away, and the lack of information on the Shared Prosperity Fund now means that the Comprehensive Spending Review in the Autumn will be the only opportunity to shed light on what will happen.

This will mean that the myriad users who currently access European Structural Investment Funding, including businesses, charities, local and combined authorities will only have a few months at most to adapt to the new system. This is not an ideal scenario.

There are undoubtedly some good things in this Budget. Increased support for North East businesses to export across the globe is very welcome and we look forward to seeing how the other new proposals will support our region.

As we aspire to create a truly Global North East we want to see support given to businesses to trade further afield than Europe, but simply down to the sheer scale of trade that the North East does with EU member states these welcome changes will seem insignificant by comparison and will therefore simply be overshadowed by such uncertainty.

The rest of the policy team will be updating members on their respective policy areas, so the Chamber blog will be full of information on the impact of this Budget on our Influential, Connected, Competitive and Working North East campaigns going forward.

The Chamber will also be collating any and all information for businesses about Coronavirus, such as available assistance for businesses, as the situation develops. Please contact anyone in the Chamber policy team regarding support around this.

Budget 2020: support for those affected by coronavirus

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The Chamber’s Arlen Pettitt summarises the actions taken by the Chancellor to mitigate the economic impact of Coronavirus.

Today’s Budget was a game of two halves, with the better part of the first half an hour of new Chancellor Rishi Sunak’s statement dedicated to a £12bn package of ‘temporary, timely and targeted’ measures to mitigate the worst economic impacts of Coronavirus on the UK’s economy.

Over the last few weeks, we’ve heard concerns from Chamber members around sick pay, the impact of a potential fall in demand – especially on those in retail, leisure and hospitality sectors – and whether there will be support available from government to help manage cashflow in what could be a very difficult period.

The Chancellor has addressed most of the obvious potential impacts today, while still acknowledging massive uncertainties in how the impact of the virus will play out across the economy.

The Bank of England also moved decisively this morning, cutting interest rates to 0.25% and making tens of billions extra available to banks to encourage them to loan more freely to households and SMEs.

The Chancellor’s actions included…

For individuals:

  • £5bn for the NHS to treat Coronavirus patients and maintain staff levels
  • Statutory Sick Pay from day one for those diagnosed or following Government advice and self-isolating. Sick notes will be available via NHS 111 rather than visiting a GP
  • For the self-employed, who are not eligible for SSP, quicker and easier access to Universal Credit or Contributory Employment and Support Allowance, without the usual requirement of attending a job centre
  • A £500m hardship fund given to Local Authorities to support vulnerable people – with an expectation that most of this will be in the form of Council Tax relief

For businesses:

  • New legislation will be brought forward to enable SMEs to reclaim SSP paid for absence due to Coronavirus – both for those diagnosed and those self-isolating. This will cover a period of two weeks absence per employee. No mechanism currently exists to refund employers, so government has promised to put this in place ‘over the coming months’
  • Retail, leisure and hospitality businesses will be eligible for 100% business rates relief in 2020/21 – businesses may need to apply to their local authorities to receive this discount. Local Authorities are unlikely to have received updated guidance before 20th March
  • If you are already eligible for Small Business Rate Relief, or Rural Rate Relief, you are eligible for an additional grant of £3,000 to help with ongoing business costs. This will impact around 700,000 small businesses across the country
  • A Coronavirus Business Interruption Loan Scheme run by the British Business Bank will be launched in the next few weeks, with loans of up to £1.2m available with 80% government guarantee.
  • HMRC have launched a dedicated team of call handlers as part of their ‘Time to Pay’ service, helping businesses and self-employed individuals manage their tax liabilities and receive support. If you are concerned about your ability to pay your tax as a result of Coronovirus, you can contact that team on 0800 0159 559