July 2017 Policy Update
A new Economic Strategy for Norfolk and Suffolk
Suffolk Chamber is representing the business voice in the County on a group steering the production of a new Economic Strategy for Norfolk and Suffolk which will succeed the current New Anglia Strategic Economic Plan.
A recent business consultation event was held on 28 June in Ipswich and further events are planned for 6 July in Lowestoft and 13 July in Bury St Edmunds.
If you can’t attend an event you can have your say here
The pre-election Local Government Finance Bill was an unexpected omission from the recent Queen's Speech. This Bill underpinned many of the pipeline changes to business rates, including 100% local retention of revenues and the switch to CPI for indexation of rates from 2020.
Prior to the election the Bill was at an advanced stage of drafting, having been scrutinised by Select Committee and subject to amendments from Parliament. Since the Queen’s Speech, The British Chambers of Commerce (BCC) has been working closely with other national business groups to get urgent clarification on this omission.
Pluses and minuses are:
+ The Bill as it stood did not contain adequate safeguards against local government treating rates as a politically-convenient cash cow. Businesses in combined authority areas could have faced both rate supplements and mayoral infrastructure levies with only minimal assurances on consultation.
+ Wider reform of rates fell short of what is really needed and there were still big question marks over the proposed process for appeals: a reset of the review would give the business community another opportunity to push for more beneficial reforms, such as the removal of plant & machinery and automatic uprating. As with Council Tax, which is fully devolved, once rates are completely localised the opportunity for more fundamental reform will have passed.
- The direction of reform prior to the election (more frequent revaluations, streamlining valuations and payment processes) was the right one. With the Government now more risk averse on major reforms, we can’t take it for granted that a reset of the review will work in the interests of businessess.
- Without additional retention of rates in return for responsibilities and more options for councils to finance investment it's hard to see how the full benefits of devolution deals will materialise.
The BCC has put together a joint letter with other business groups which has now been delivered to the Government and Opposition. You can see the joint letter to the Chancellor here and joint letter to Shadow Chancellor here. The grouping will lobby the relevant Ministers and departments to take forward the positive aspects on the dead Bill through legislative routes such as the Autumn Finance Bill and secondary legislation.
London Stansted Airport
Stansted Airport has announced a programme of local consultation in advance of submitting a planning application to increase passenger and flight numbers at the airport which would enable full use of the single runway.
Since MAG acquired Stansted in 2013, the vision has been to make full use of the airport‘s existing capacity in the most sustainable and responsible way. Over the last four years Stansted has been one of the UK’s fastest growing airports with passenger numbers increasing by over 40% to 25 million today. Cargo operation is the third biggest in the UK, helping British businesses trade with the global marketplace. In total, Stansted Airport now employs over 12,000 people.
As part of the long term plan Stansted Airport intends to invest significantly in improving the passenger experience, having recently secured planning consent for a new £130 million arrivals building. As they continue to grow they want to attract more airlines and a larger route network, essential to the delivery of the Government’s objective to increase international connectivity and trade post-Brexit.
With passenger numbers at Stansted expected to reach 35 million by the early 2020s and a new runway at Heathrow at least a decade away, Stansted Airport wants to provide certainty for their airlines, the business community and local resident by making best use of Stansted’s single runway existing capacity. These plans were laid out in the 2015 Sustainable Development Plan, the final version of which is available at www.stanstedairport.com/developmentplan
Later this year Stansted Airport plans to seek permission from Uttlesford District Council, to raise the cap from 35 to 44.5 million passengers a year (mppa) and allow an extra 11,000 flights (an increase of 3.9 per cent over the currently permitted number). These plans can be delivered within both the current boundary of the airport and existing environmental limits, supporting the East of England economy and the UK’s growth ambitions in the most cost effective and sustainable way possible.
At this stage Stansted Airport wants to gather the views of the business community to help shape their plans and will also be hosting a number of events over the coming months.
There is a short briefing on the plans 'building for the future' that you can view here and you can let Stansted Airport know your thoughts and views at www.ourstansted.com
British Chambers of Commerce comments on Transport Investment Strategy
Commenting on the Transport and Investment Strategy recently announced by the Department for Transport today, Jane Gratton, Head of Business Environment at the British Chambers of Commerce (BCC), said:
“Infrastructure projects, both large and small, give business communities across the UK real confidence. A long-term approach to improving productivity and connectivity is welcome but businesses have seen strategies come and go, the real proof comes when they see diggers in the ground.
“Investment in local roads will be particularly well-received by businesses who often express frustration at the capacity and quality of the current system. While ‘A’ roads are of national strategic importance, local areas are best placed to identify how those assets may be enhanced to promote growth opportunities and should be given the flexibility to do so.
“UK businesses want to see progress on major projects such as Heathrow and HS2, but action on smaller schemes such as local road and rail maintenance unlocks access to major cities and create new paths for communities in all parts of the country.
“Businesses will want this strategy to represent additional and better-focused investment to provide the UK with a quality infrastructure system that supports business growth. Transport projects ‘crowd in’ additional investment, generate jobs on site and across supply chains, and support greater connectivity between businesses and their markets, suppliers and customers.”
Business Brexit principles
British Chambers of Commerce, CBI, FSB, IoD and EEF have formulated a high-level joint statement on the UK’s future relationship with the European Union – covering both a transition phase and principles to underpin a final agreement between the UK and the EU-27. Taken together, the principles in the statement represent a starting position for all five major business groups to work cooperatively with each other – and with Government. You can read the statement here.
Guarantees for EU citizens living and working in the UK
The Government has published a factsheet on EU citizens’ rights which can be read here.
The Queen’s Awards for Enterprise
The Queen’s Awards for Enterprise recognise, encourage and celebrate the outstanding achievements of UK businesses in the fields of:
Sustainable Development; and,
Promoting Opportunity (through social mobility).
Whether a small business with a great innovative product or service, or a larger company running an impressive social mobility programme, these awards are a prestigious way to recognise your contribution to enterprise.
The Queen’s Awards for Enterprise are open to applications from almost all businesses of all sizes throughout the UK in every sector and the benefits of winning include:
The use of a recognised emblem that will get your business noticed, above and beyond the competition;
Global recognition that your company is outstanding in its field;
Increase in sales and growth;
Boost in staff morale; and
Invitation to attend a Buckingham Palace reception
73% of winners in the International Trade category directly attributed increased sales to winning a Queen’s Award.
Almost all UK businesses (including non-profit) can apply and the application process is free. All applications must be made online and you may apply for more than one category. The application process for the 2018 Queen’s Awards for Enterprise closes at midday on Friday 1st September 2017. All entry forms, eligibility criteria and information on how to apply is available here.
British Chambers of Commerce: Anaemic economic growth reinforces case for action on business environment
The British Chambers of Commerce (BCC) has slightly upgraded its UK growth forecast for 2017 from 1.4% to 1.5%. Its expectations for growth in 2018 and 2019 remain unchanged at 1.3% and 1.5% respectively.
Despite the slight upgrade to our outlook for 2017, growth over the next few years is forecast to remain anaemic – and well below historical averages.
Despite slower than expected growth in Q1 2017, the leading business group has slightly upgraded its growth forecast for 2017 as a whole – mainly as a result of stronger global outlook growth, including in key markets for UK businesses. While lower sterling has had mixed results of late, it remains likely to boost short-term export activity this year.
Rising inflation is anticipated to remain a key concern for businesses and consumers, and is forecast to peak at 3.4% this year - a five year high. Our new forecast is that the first increase in UK official interest rates, to 0.5%, will occur in Q1 2018. This is three quarters earlier than predicted in our Q1 forecast.
With inflation rising and average earnings growth is expected to hold steady, wage growth in real terms is expected to remain negative over the next few years. As a consequence, consumer spending, a key driver of UK growth, is forecast to remain persistently weak over the next few years.
Economic growth is expected to remain well below historical averages through the forecast period, which reinforces the need to focus on creating the conditions for growth in the UK economy. Following an inconclusive General Election, the Chamber Network is calling for a cross-party focus on supporting business in all parts of the United Kingdom over the crucial months and years ahead.
Key points in the forecast:
UK GDP growth forecast for 2017 is upgraded to 1.5% and is expected to slow to 1.3% in 2018, before rising to 1.5% in 2019. GDP Growth of 0.4% expected in Q2 2017;
GDP growth forecast for 2018 remains unchanged at 1.3%, and for 2019 at 1.5%
Inflation of 2.9% is forecast for this year, peaking at 3.4% in Q4 2017. Inflation is expected to slow to 2.8% in 2018 and 2.5% in 2019. The previous forecasts were for 2.4%, 2.7% and 2.5% respectively;
First increase in official interest rates, to 0.5%, is expected in Q1 2018 - earlier than the prediction of Q4 2018 in our previous forecast;
Consumer spending growth has been downgraded for 2017 from 1.6% to 1.3%, and is expected to slow to 0.9% in 2018 and 1.2% in 2019 as real wages are eroded by inflationary pressures;
Business investment growth has been revised upward from -0.5% to 0.3% in 2017, driven by a strong first quarter, but we forecast that it will remain muted at 0.5% in 2018 before growing by 1.2% in 2019; and
Export growth for 2017 has been upgraded from 2.7% to 3.1% but is forecast to slow to 2.9% in 2018 and 2.8% in 2019.
Looking at sectors, construction has been upgraded from 0.4% to 1.1% in 2017 and is expected to grow by 0.7% in 2018 and 1.2% in 2019. The services sector is expected to grow by 1.7% in 2017, 1.3% in 2018 and 1.6% in 2019. Manufacturing is to grow by 1.2%, 0.6% and 1.2% respectively.
You can read the full forecast here.
National Business Crime Centre
The National Business Crime Centre is issuing a series of newsletters with advice to the business community. The first focuses on terrorism and can be read here.
Heathrow’s SME Grants Programme ‘World of Opportunity’
Heathrow has launched its World of Opportunity SME Grants Programme, in partnership with the Department of International Trade’s Exporting is Great Campaign. As UK's hub and biggest port by value, Heathrow aims to support SMEs across the UK. Heathrow has established a grants programme to offer £2,000 to growing businesses to help them begin exporting or reach new markets. The applications process is now open and 20 UK SMES will each win a grant to help fund a trade mission, trade show or market research. Applications are open until 14 July, and further information can be found on the website.
Apprenticeships are said jobs which incorporate on and off the job training. Apprentices have the same rights as other employees and are entitled to be paid at least the apprentice rate of the national minimum wage. A successful apprentice may receive a nationally recognised qualification on the completion of their contract.
There are two different types of apprenticeship schemes, frameworks and standards. Apprenticeship frameworks are being progressively phased out and replaced by the newer apprenticeship standards.
Almost 900,000 funded apprentices participated on an apprenticeship in the 2015 to 2016 academic year, and the Government has set a target of 3 million new apprenticeships by 2020.
There is a useful summary of apprenticeships policy and developments in England here
Competition and Markets Authority (CMA) – Changes to merger thresholds
The CMA has confirmed changes to reduce the number of mergers it investigates in smaller markets. The CMA will now raise the figures for markets generally considered as sufficiently important to warrant a merger reference from above £10m to above £15m. It will also lower the figure for markets considered not sufficiently important from below £3m to below £5m. Further details are available here.
Where the size of the market is between these figures, the CMA will continue to assess whether the expected harm resulting from the merger would be materially greater than the cost of an investigation.
It is expected that the changes will reduce the number of mergers that are subject to investigations – including those subject to initial phase 1 examination.
Business energy market reform – new rights for small firms
New measures to improve competition in the business energy market, introduced by the Competition and Markets Authority (CMA), will take effect. The new measures include a prohibition on the auto-rollover of contracts to fixed-term tariffs; higher minimum standards on information disclosure and tariff transparency. To learn more about the new rights acquired by small businesses as consumers of energy see summary of the changes.
British Chambers of Commerce (BCC) Westminster activities in support of Suffolk Chamber members
BCC and the Chamber Network are right at the heart of current discussions on Brexit, international trade, and a range of other issues:
EU Exit Council
After months of engagement, BCC and the Chamber Network will now be one of just five business organisations - together with CBI, IoD, EEF and FSB — to be members of the formal body for business engagement on Brexit. This will be chaired by Business Secretary Greg Clark, with regular participation by the Brexit Secretary, David Davis, and the Chancellor of the Exchequer, Philip Hammond and DGs of the five business groups.
DIT Business Forum
The BCC public affairs team has also been successful in encouraging the Department for International Trade to hold a similar business engagement forum. Liam Fox, the Trade Secretary, is now convening the first meeting of this forum — again with the DGs of BCC, CBI, IOD, EEF and FSB — on 10th July. This will provide an opportunity to influence the Government’s planned Trade Bill.
BCC recently met with the Customs Policy team at Treasury to organise a series of regional roundtables with Chambers and their members, attended by policy officials in HMT and HMRC, with other government departments invited where appropriate – particularly BEIS and DExEU. We will continue to lobby for a Chamber role on the roll-out of Authorized Economic Operators and will participate in regular Joint Customs Consultative Committee meetings with HMRC, including the Brexit subcommittee.
BCC is also engaging with Peers ahead of the Customs Bill legislation with the aim to secure activity undertaken by Chambers in future UK Customs Code and other customs legislation.
National Infrastructure Commission
BCC spoke at an event with other leading business organisation with a keynote speech by Lord Adonis, the chair of the National Infrastructure Commission, on Monday 26th June.
Post-Brexit Regional Funding in England
BCC is convening a group of senior Chamber representatives to meet with DCLG to progress discussions on the principles for post-Brexit regional funding mechanisms in England.
BEIS SME Advisory Board
Convened by Small Business Minister Margot James, BCC this forum on behalf of the BCC and the Chamber Network.
British Business Bank
Adam Marshall will be meeting Lord Smith of Kelvin, the BBB’s new Chairman, on 18th July, to discuss how the BBB can better support business finance needs across the UK.
World Chambers Federation
The Executive Committee of the WCF recently invited Adam Marshall to give an update to WCF members on Brexit.
Automatic enrolment messages for employers – June 2017
Employers need to tell The Pensions Regulator how you have met your automatic enrolment duties – this is called a declaration of compliance.
You need to complete a declaration of compliance within five months of your staging date (or duties start date) to tell The Pensions Regulator how you have met your automatic enrolment duties, whether you had anyone to put into a pension or not.
Employers who declared their compliance late have told The Pensions Regulator that they thought that this task was being done by someone else – either by their pension provider or their business adviser.
Don’t risk a fine – make sure the declaration of compliance is completed and submitted on time. The Pensions Regulator has a checklist to help you.
Taking on a new member of staff? You need to work out if they’ll need to be put into a pension scheme – it’s the law.
The Pensions Regulator carries out spot checks on employers across the UK to make sure they are complying with their workplace pensions duties.
As well as finding out whether new staff members will need to be put into a workplace pension scheme (from the first day they start working for you), you also have other ongoing duties. You’ll need to monitor the ages and the amount you pay your existing staff on an ongoing basis to see if you need to put any of them into a pension scheme, manage requests to leave/join your scheme, as well as keep records of what you’ve done.
The Pensions Regulator has guidance to help you find out what you need to do to meet your ongoing legal duties for automatic enrolment.
Thinking of employing someone for the first time? Don't ignore the workplace pension.
Taking on staff is an essential part of growing a business. If you are thinking of taking someone on for the first time, there are a number of things to consider, such as deciding how much to pay, checking if someone has the legal right to work in the UK, determining whether you need to register as an employer with HMRC, taking out employer’s liability insurance, and so on.
Getting ready for automatic enrolment is just one of those steps. The Pensions Regulator is responsible for ensuring that all employers comply with workplace pension law – you risk a fine if you do not comply with the law on time.
The Pensions Regulator has guidance and support to help you find out exactly what you’ll need to do and when.
British Chambers of Commerce Monthly Economic Review
The BCC Economic Review for June has been published, providing an easy-to-use commentary on the key domestic and international economic indicators for business.
This month's headlines:
UK GDP growth in Q1 revised down as the trade deficit widens;
UK consumer price inflation rises to three-year high as pay growth continues to slow; and
Indian economic growth slows sharply as Brazil emerges from two-year recession
The full Review can be read here.
To discuss these and other policy issues, contact: