BCC Business Manifesto for new Prime Minister

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The British Chambers of Commerce (BCC) has sent the Prime Minister a Business Manifesto to get firms through the tough months ahead and then power the UK’s economic recovery.

Businesses are the very bedrock of the economy but currently face a host of challenges which threaten the survival of many; eyewatering energy bills, labour shortages, 40-year high inflation, and rising interest rates. The Bank of England is now also forecasting a two-year recession.

The BCC’s latest Quarterly Economic Survey highlighted an alarming drop in business confidence and conditions, with key economic indicators falling back to Covid-crisis levels. One in three firms reported a decrease in cashflow, while 25% reported a decrease in domestic sales. 

In the wake of the October fiscal statement, the BCC conducted a snap poll of almost 500 firms, to assess the extent to which the Chancellor’s plans would impact their investment intentions.

Overall, only 6% of businesses said they would increase their investment, while 37% said they would decrease it as a result of the fiscal statement.

The BCC’s Business Manifesto sets out 17 key policies designed to tackle the challenges facing businesses across the economy, the labour market, international trade and Net Zero.

Top of the list for urgent action are:

Investment in infrastructure

Government must prioritise long-term growth by financing public projects, with a particular emphasis on green and digital infrastructure. As a result of the Multiplier Effect, investing in public infrastructure, such as the HS2 rail link, will have a high value impact on growth; stimulating local economies and creating jobs across the UK.

Energy support for businesses

Rising energy costs is the number one concern cited by businesses. Government must provide certainty on how the energy support package will work from April so that businesses can plan for the future.

Tackling the tight labour market

There are currently 1.2 million unfilled jobs in the UK labour market, meaning businesses must turn new work away. Government must promote the creation of a skilled workforce by offering tax breaks to businesses that invest in training and upskilling. The UK also needs an immigration system that caters to the needs of the labour market. A reform of the Shortage Occupation List is urgently required to help businesses fill job vacancies when they cannot recruit locally.

Promoting export-led growth

More than a quarter (28%) of SME exporters reported decreased sales in Q3 of this year. International trade presents significant opportunities for UK businesses to expand and grow. However, barriers to trade must be removed in order to allow firms realise their full trading potential. The UK Government must work with the European Commission to reach a negotiated solution on business compliance burdens with the Protocol on Ireland/Northern Ireland.  

Presenting the BCC Business Manifesto, Shevaun Haviland, Director General of the BCC, said:

“Our research indicates business confidence has plummeted to alarmingly low levels, not seen since the height of the pandemic. The political and economic uncertainty over the past few months, and the turbulent financial conditions following the Government’s mini budget have damaged this even further.

“We are now on borrowed time, and the new Prime Minister must step up to the plate. Businesses can’t afford to see Government make any knee-jerk decisions that damage long-term growth. If Government fails to support firms now, we will be starting from a very weak base to power our recovery once global economic conditions stabilise.

“With a new Government and Prime Minister at the head of the table, it is high time we saw a long-term growth plan that involves investment in people and skills; supports businesses to adapt and thrive; and builds good relationships with our global allies to get British businesses selling again.

“In the remaining period of this Parliament, the BCC urges the Government to strike the right balance for growth without compromising our great public institutions that so many of us rely on.

“People run businesses and businesses rely on people. This Business Manifesto offers solutions, including cost-free options, to get our economy moving in the right direction again.”

BCC ManifestoDownload

Offshore wind would not completely fill the energy gap

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Rachel Anderson, Assistant Director of Policy, latest column for the journal

I’m going to start this column by looking at the events of the past week.  It’s hard to avoid phrases like blow hard, hot air, pressurised, blades and nuclear option.  Now I know there are several things I could be talking about, but I can assure you none of what follows will relate to anyone’s current tax affairs, party investigations or the sound of knives sharpening in Westminster.

What I am talking about is the long-awaited Energy Security Strategy announced by the Prime Minister.  We’ve been waiting for decisions from Government for a long time and it feels as though “events” elsewhere have forced action.  Leaving aside the debates about where the fuel for our energy generation comes from, we have a looming energy gap in 2024 as old nuclear stations decommission and fossils phase out.  Whilst we’ve made real progress on renewables, there is still a gap & a cold, calm, cloudy day pushes us very close to demand outstripping supply.

So, what does the document say and how might it affect the North East? The main focus is on the Nuclear option and 8 new power stations built on existing sites. Building new reactors adjacent to existing means, the skills, a ready and experienced workforce and much of the tertiary equipment is already there. A small nuclear station like Hartlepool contributes approximately £50 million a year to the local economy.

The strategy skirts around onshore wind. It’s obvious that offshore wind would not completely fill the energy gap – it is very important and can be done at scale (with huge benefits to Tees and Tyne) but it is just not enough. Onshore wind is potentially the most egalitarian, everyone has it so has the potential to see a turbine from their kitchen window (I can see one from mine). That doesn’t go down well with very planning sensitive backbenchers.

There is an opportunity for a policy reset if onshore does return but it will be a heck of a political fight 2 years out from an election. There is also a boost here for the manufacturers and we have more capacity in the UK than previously so there is a dividend there.

Hydrogen has real potential both in terms of transport and retrofitting domestic and commercial as well as industrial uses. We have an expanding hydrogen manufacturing capability on Teesside with the potential to significantly scale up.

What is lacking is any indication of solid funding for this energy list, it’s a solid investment and it is not a quick fix.

Maybe buy a few more candles just in case.

We need Government to improve in housing, living costs and high street development

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Jack Simpson, International Services Executive, latest column for the Journal

Last week, the UK Chancellor gave a “Spring Statement” to Parliament, an update on the country’s finances and government’s spending plans, but you’d be forgiven for not knowing it even happened.

I say that because there was a lot of words about the economic pressures impacting the UK, it lacked any major support to tackle this historic cost of living we are all experiencing.

The cutting of fuel duty was one of the “major” announcements, and any cut will be welcomed by those in the haulage industry especially. But the rate at which living costs have been rising over the last six months, the cut of 5p a litre probably only takes us back to the price of fuel last Wednesday!

To me, this Statement represented a major flaw in modern politics in which policies addressing symptoms are favoured, rather than tackling the long-term causes.

Part of this is down to election survival, and the cynics among us will note the Chancellor announced a planned tax cut in 2024, the year of the next UK election. Working election to election favours short term fixes, rather than long term solutions to problems, as that Government may not be around to reap the rewards.

For example, the logistics industry has bee struggling for years with driver shortages, border delays and rising energy and fuel costs. We’ve all seen the pinch over the last year, as goods struggle to move in ad around the UK prices rise or stock vanishes from shelves.

We need Government and opposition to collaborate seriously to take on these long-term issues, not just in logistics, but in housing, living costs, high street development and more.

As part of the Chamber’s International Team, I must mention (again) the absence of global support. UK export growth, particularly in the wake of Brexit, is lagging behind international competitors.

Trade has been largely impacted over the last two years, lockdowns, Brexit and supply chains to name a few, yet little has changed in way of support or accelerating for exporting businesses. As a Chamber we have been supporting members navigate barriers or upskill staff, but Government needs to help business tackle the structural challenges pressuring our regional traders.

I felt Government recognised the economic pressures we’re seeing daily, but without the political capital to do so, failed to assure these problems will be resolved or confidence that economic life will get better.

Levelling Up – what do voters really want from the Government’s flagship policy?

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Prime Minister Boris Johnson has described Levelling Up as “the greatest project that any government can embark upon”, but what does it really mean? Ahead of the Government publishing its White Paper on Levelling Up, North East of England Chamber member, DWF Law LLP drafted a report looking into Levelling Up and how the initiative can be better designed to match the aspirations of the voters it is intended to benefit.

The process of investigating what voters in the North and the Midlands really want from Levelling Up involved DWF working with YouGov to survey the views of over a thousand adults living in unitary and combined local authorities within the North and Midlands in June 2021. This was followed up by a roundtable event in which we invited a highly experienced panel of leading public sector experts to consider the data and put forward ideas as to how Levelling Up could be most effectively delivered in line with voter priorities. The findings are set out in the report: Will Levelling Up meet voter priorities?

The eight key findings from the report were:

  • despite general support for the notion of Levelling Up there was no clear understanding of exactly what the term means. Indeed, only 29% of respondents were clear about what Levelling Up means. That said, voters were able to put forward an idea as Levelling Up should be defined, which should help the Government clarify its message in future;
  • jobs are widely seen as an effective way to make an area more appealing, but opinions on the ability for young people to secure jobs, let alone ‘good quality’ ones are currently downbeat. 70% of respondents recognised that it is difficult for young people to find good quality jobs in their area. Based upon this, the Government would do well to put securing high quality jobs at the forefront of the Levelling Up Fund and the UK Shared Prosperity Fund’s objectives, recognising that for many voters, this will be a key measure of the success of Levelling Up;
  • residents of the North and Midlands want to feel pride in the areas they live in. However, in reality they have mixed feelings about the state of their towns and cities, presenting an opportunity for astute politicians to win votes by addressing this, provided they can show a clear connection between devolution and improvements to local areas. Only 2% of respondents felt that pride in place was not at all important. As Sarah McMillan, Director at Northumberland County Council observed “during the pandemic, people started to spend much more time at home, so I think pride of place has risen up the agenda for a lot of people”;
  • Metro Mayors and Local Councillors are seen by the public as exerting a meaningful impact upon local improvements, even more so than Westminster MPs. That said, Local MPs are still seen as having an important role in securing investment, especially if an area has an MP from the governing party. The Government may reflect upon these findings, by not only giving Metro Mayors and Councils greater powers and resources, but also finding a way for them to work together to better effect change in their local areas, for example enabling local leaders to input into the legislative process or shape funding programmes;
  • for those surveyed, a priority for government investment is public safety and anti-crime measures. It was significant that 65% of respondents regarded increased investment in law and order as very important. Indeed, support for this was strong across all groups, suggesting that recognising law and order forms part of the Levelling Up agenda would prove a vote winner;
  • 44% of people surveyed regard their area as having declined over recent years, with a correlation between leave voters and a stronger negative perception of their local area. This perception could well affect the ability of the Conservative Party to hold on to former Redwall seats at the next General Election, so may inform the allocation of public funding in the coming years;
  • those surveyed place a greater importance on improved local transport rather than regional or national links. Local roads and buses are much higher priorities than train services or links between the North and Midlands and London, which has implications for HS2. As Rachel Laver CEO of Marches Local Enterprise Partnership observed “good local public transport, including greenways and cycleways are vital for people on low incomes travelling to work”; and
  • when looking at the results by markers such as age or voting/political views, some clear divides emerge. Remain voters are generally more positive about their areas, while older people displayed more pessimistic views than younger ones. What will be the long-term impact of this?

Before joining DWF’s Public Sector team, I was a Senior Solicitor working for what is now called the Department for Levelling Up, Housing and Communities, advising Ministers and Civil Servants on how to deliver regeneration projects using public funding. Therefore, I have a long standing personal interest in the regeneration of the North and passionately want Levelling Up to succeed. What comes through in this report is that whilst there is much support for the Government’s positive vision as to how the North and Midlands can become more prosperous, this now needs to turn into meaningful action. In particular, delivering Levelling Up, in line with what voters in the North and Midlands want, requires the Government committing to the right investments in a number of areas, including transport, skills and infrastructure.

Levelling Up will only be the greatest project that a government can embark upon, if it is successful. Right now, the success of Levelling Up is in the balance. However if the Government can get this right then the benefits will be extraordinary and enjoyed for generations to come.

Alexander Rose

Director, Newcastle at DWF

DWF Profile

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Photo by Nick Kane on Unsplash

Government’s LGBT Champion Visits Pride Media Centre

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Iain Anderson, the Government’s LGBT business champion praised the work of North East England Chamber member Pride Media Centre, home of Pride Radio, on his first visit in his new role.

He talked about his own background and the route to his current business success as executive chairman of Cicero/AMO strategic communications advisors.

In Iain’s speech he explained how his business life and home life were kept distinct during his early career as he was concerned how clients might react to finding out that he was gay.  However, the result when he did explain his sexual orientation was extraordinary with the company growing five-fold and everyone being supportive.

Iain praised the Pride Media Centre as being inspirational and explained LGBT success stories are often set apart from mainstream business but he was delighted that the centre incorporated such a variety of entrepreneurs. 

On behalf of the Pride Media Centre, Peter Darrant-Parkes said: “We are delighted to welcome Iain Anderson to the Pride Media Centre for his first official engagement as the new UK LGBT Business Champion.

“Since opening in 2109, we have prided over selves on offering a safe and engaging space to be creative and do business. Having Iain experience the Pride Media Centre and meeting so many of our tenants and clients has been a proud moment.”

Iain Robinson also shared his advice on growing a business. He said: “Having a great company is not just about diversity itself.  You need to have support around you so everyone can be their authentic self at work.

His advice for organisations that want to be supportive of LGBT employees and colleagues was to set up a mentoring or buddy scheme. 

Niamh Corcoran, policy adviser, North East England Chamber of Commerce said: “Iain Anderson’s advice was inspirational and could make a huge difference to people who may be feeling isolated at work due to their sexual orientation. Everyone should be able to be true to themselves at work, and I would encourage employers to have a buddy program at their workplace to support this.”

He also encouraged people to look at the global conference on LGBT and diversity, due to be hosted by the UK in June 2022 called ‘Safe To Be Me’.  This event will tackle key issues such as access to public services and addressing violence towards the gay community as well as highlighting it still being illegal to be LGBT in some countries around the world.

Iain Anderson said: “Sometimes people are scared of using the wrong language with colleagues who are gay and they shouldn’t be when they are trying to be supportive. It makes people hold back but I say just do it, don’t worry too much about mistakes. 

“Businesses have an important role in encouraging social reform and creating inclusive places to work.”

Pride Radio won the community radio station of the year in October 2021.

CHAMBER DEMANDS A REAL LEVELLING UP BUDGET

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North East England Chamber of Commerce has written to the Chancellor ahead of the Budget on 27 October urging him to help level up the North East following the enormous impact of the pandemic.

In the letter, John McCabe, Chamber chief executive, set out in stark terms how the pandemic dealt an enormous and disproportionate blow to the North East compared to the rest of the UK.

He said: “Covid has not been blind to economic circumstances.  Its effects have been most profound where deprivation is the highest. The human cost of the pandemic has been appalling, yet there is also a tremendous economic cost, acerbating the regional disparities that have given rise to the unequal impact of the virus. Levelling up was of huge importance prior to the pandemic. It is now critical.

“Our businesses have performed admirably throughout the pandemic and are now beginning to see encouraging signs of recovery. They want this recovery to be sustainable, fair, and long- lasting.”

Recommendations for Government action from the Chamber cover a range of issues including the need for a clear definition of levelling up and more devolved powers.

It emphasised the importance of essential rail investment, the establishment of the long-awaited UK Shared Prosperity Fund based on regional economic need and incentivisation of investment in low-carbon housing and retrofitting.

The Chamber also stressed the combination of factors that have been so challenging to North East businesses.

In addition to the pandemic, the North East was particularly exposed to the consequences of Brexit. Many businesses saw an almost overnight fall in their European sales and have been struggling to adapt to rules, costs and subdued demand. This has undoubtedly compounded the challenges they have faced in recent months.

As well as this the letter said there were continued problems created by disruption to global supply chains and staff shortages.

The letter also highlighted the need to properly fund and support the region’s further and higher education sector and to increase funding flexibility to encourage employer investment in training.

John McCabe said: “Levelling up is a long-term project that will not be resolved through one Budget. However, the decisions and investments the Government makes on 27 October will be judged by how effective they are in moving the country towards a fairer, more balanced economy.”

The letter also extended an invitation for the Chancellor and his team to meet the Chamber and hear at first-hand its members’ views.

To access the letter click here

Chamber-Budget-Letter-to-Chancellor-Sep-21Download

The Government need to find a solution for the shortage of gas

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Rachel Anderson, Assistant Director of Policy, latest column for the Journal

You’d be forgiven for uttering an exasperated “what fresh hell is this” and pulling the duvet back over your head this morning.  Just as it seems we might be emerging from the pandemic and there is a smile on travel agent’s faces, the next crisis comes galloping over the horizon and we’re suddenly short of gas.  Before we chop up the furniture, let’s be clear, we’re probably not going to run out, but our gas is costing us on average two and a half times more than it’s costing our European counterparts, as gas is still a major part of our electricity generating capacity it’s less the sunlit uplands and more the unlit ones.

But this matters, it really matters.  Businesses have faced unprecedented pressures over the last 18 months and to be hit by such large rises in energy prices as they are trying to pull themselves back into profitability feels like a an almost impossible task.  Following every recession, it is often the recovery period which proves the most difficult for many companies as cashflow is king and finding the resources to meet the upturn in demand can be difficult with credit lines stretched.  A restaurant re-opened following two lockdowns facing increased wages due to staff shortages, difficulties in the supply chain, not least due to a CO2 shortage caused by the increased gas price, they will perhaps also be beginning to pay back Government loans taken through the pandemic might be forgiven for just closing the doors and walking away. 

But also to be considered is when those energy price hikes hit the general population, what happens to spending amongst the population?  Less disposable income means less spend and a significant slowdown in the economy in just those sectors hit hard.  Energy prices affect most companies, only the ones who have invested in green technologies escaping the fluctuations and reduced profit margins knock on into wage rates and can affect investment plans.  Longer term, the need for a coherent energy strategy is writ large but this is an emergency in the shorter term which will require a robust response.    

Knitwear manufacturers and candle salesmen may well see an upturn in business; but joking aside there are some bumpy times ahead and once again we look to the Government to find solutions not only to the UK’s supply problems but also to support our storm battered businesses once again. 

Chamber broadly welcomes Chancellor’s budget

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Jonathan Walker, director of policy, North East England Chamber of Commerce said:

“We’re really pleased that the Chancellor supported many of our biggest business priorities today. We had campaigned hard for more business support measures and for the relocation of Treasury jobs to our region. Government has listened with the announcement of a business rates holiday, an extension of the furlough scheme and support for specific sectors like hospitality, as well as the great news about the new economic campus in Darlington.

“It is also really positive that our region will have a freeport. We now look forward to seeing the detail on how it will be delivered to add genuine economic value.

“However, other parts of the North East will be feeling like they missed out on investment and we urge Government to reconsider the value and opportunities of a second Freeport and other major projects in the north of our region.

“There is good news today, make no mistake, but the journey to recovery and genuinely closing the economic gaps in our country is only just beginning.”

Rachel Anderson discusses Treasury relocation

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Assistant Director – Policy, in her latest column for the Journal

I’ve checked and I don’t think we are the regional embodiment of reality TV but hey in this day and age not much surprises me. This week a quick squint at the Radio Times tells me we have competitive dog grooming, throwing pots (at what?) or marrying Australians without seeing them first. So, the latest Government regional bidding beauty contest made me do a double take to make sure it wasn’t being filmed.

The prize on offer this time is who will be the lucky town/city/piece of land which gets to play host to 750 relocated Treasury officials supposedly being moved out of London as part of the Government’s levelling up agenda. Areas in the North of England fighting it out in the contest need to put their best side forward on what kind of office block they can offer, how nice it is and, probably the most crucial – how fast can you get back to London. I haven’t looked to see if there’s a swimsuit round or we must go on a date with the Fiscal Responsibly Department (they’d get a calculator out to split the bill),but the lucky winner will be announced in the Season finale around the time of the Budget in early March.

Now there is a lot to be sceptical about.Will it ever happen?We’ve all seen ‘Yes Minister’ and we know there is some subjectivity about the level of jobs which might be moved. It has also been a stated ambition of every Government of the last 30 years, but none have made it yet.

The Treasury has said they will be significant decision makers amongst them, a press release even said there was” great enthusiasm” amongst the staff but you do wonder how many will genuinely rethink their winter wardrobes rather than googling Air BnB availability for 3 nights a week.

And that’s the point, it is great that at least someone in Government recognises the value of moving decision makers to the regions and 750 well paid, skilled office workers would be very welcome. We know what a great place this is to live and work but they don’t. There’s a huge difference between commuting then spending your wages at homeand making a genuine commitment to the region to live and work.

The region’s economy will only truly benefit if it is the latter.

Chamber calls for investment in adult education

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North East England Chamber of Commerce has urged Government to expand and invest in the adult education system, to help tackle the region’s low skills base, more important than ever due to the pandemic. 

On behalf of its members including Further Education Colleges, Chamber chief executive, James Ramsbotham said: “Our region is facing many structural economic challenges which will fundamentally alter how the skills system needs to operate. These challenges include not just the Covid-19 pandemic, but also the UK’s exit from the European Union and the shift to more automation and digitisation.

“The pandemic has rapidly accelerated a technological evolution. The onus will, therefore, be on the skills system to help people re-enter work and, where necessary, new sectors of the economy. Research has consistently shown a strong correlation between adults undertaking education and training courses and successfully re-entering work, particularly for non-graduates.”

“Ensuring that our skills system is fit for purpose is integral to the North East’s future prosperity and ability to level up. The North East entered this crisis with an already high unemployment rate, which leaves the region disproportionately vulnerable to any national increase in joblessness.”

The letter states the North East adult education system is suffering from long-term under-investment and rock bottom participation rates.  These low rates in adult education are also disproportionately concentrated in lower-socioeconomic groups, 

In addition, if participation rates are to increase, the barriers preventing adults from taking part in adult education and training must be tackled.  These include support currently only for people who don’t have a level 3 qualification already and no training allowed for people on benefits, who want to have to attend over 16 hours tuition a week. 

James Ramsbotham said: “Government needs to demonstrate the value of adult education and retraining on a wide scale with participation rates at record lows. It is particularly important to target those from lower-socioeconomic backgrounds who are less likely to engage in adult education, despite benefiting disproportionately from it.

“Before the last election, the Conservative manifesto committed to re-prioritising the further education system. The North East has one of the lowest skills bases in the UK, with workers often locked into low paid jobs or falling into unemployment at higher-than-average rates. Ensuring that the adult education system has the attention and funding it needs will be crucial to the levelling up agenda. Now is the time for Government to commit to life-long learning.”

The Chamber letter was co-signed by its members Darren Hankey, principal, Hartlepool College and Nadine Hudspeth, director of communications, Gateshead College. A copy of the letter is here and a case study of Darren Hankey’s own experience of the benefits of adult education on his own life is here.