July 2018 Policy Update


Suffolk Chamber lobbies Roads Minister for A14 improvements

Suffolk Chamber took full opportunity of a meeting on 27 June with the Roads Minister for the Department for Transport to press the local and national case for improvements to the A14 in Suffolk.

Chief executive John Dugmore and Nick Burfield, policy director, joined Bury St Edmunds MP Jo Churchill in meeting with Jesse Norman MP in his House of Commons office.

“The No More A14 Delays in Suffolk campaign is one of our most important current strategic lobbying initiatives and we wanted to emphasise the importance of the highway not only to local businesses, but as the arterial route for goods passing through Felixstowe to and from the Northern Powerhouse and Midlands Engine.” explained John.

“I think the Minister got the message about the A14 in Suffolk and we were encouraged by his level of interest and the responses he gave.”

Jo Churchill MP added "the meeting was a constructive discussion about the importance of the A14 including, for my constituents, around Junction 43 and 44 of Bury St Edmunds.

“It is vital we continue to push for improvements to this stretch of national strategic infrastructure."

Highways England, the government-owned company with responsibility for the operation, maintenance and improvement of the motorways and trunk roads in England, issued its Strategic Road Network Initial Report late last year.

Within it, the A14 in Suffolk is marked as a ‘current, planned and potential expressway’. Expressways are motorway-grade two-lane highways and their designation requires that all junctions off and onto them are enhanced.

The report outlines the phased process in upgrading a highway into an expressway, including improvements to junctions with other roads – the key demand of the Suffolk Chamber-led campaign which is calling for significant investment at seven pinch points.

Suffolk Chamber and its partners submitted their support for these proposals during the consultation by the Department for Transport (DfT) into this report at the beginning of the year.

The DfT is due to announce the successful schemes within the next year, with work expected to begin on these between 2020 and 2025.

Bidding in Suffolk for public sector contracts

If the public sector is taken to include not only local councils, the Police and health bodies, but also the University of Suffolk and local colleges, then total public sector spend within Suffolk in 2017 was estimated to be about £1.9 billion.

The Suffolk Growth Programme Board (SGPB), on behalf of the local public sector, is now undertaking work to understand both the buyer’s view - how public sector procurement currently operates, and the supplier’s view – the experiences of local businesses in bidding for public sector contracts.

Suffolk Chamber of Commerce has been commissioned to undertake a survey of businesses across Suffolk as to their experiences of and attitudes to public sector procurement.

This role is aligned to the ambitions set out in the Suffolk Chamber of Commerce manifesto for business, specifically: “improving procurement opportunities so that all public sector partners better engage with local businesses in promoting and deciding upon contracts in their supply chains.”

Alongside this, an additional piece of research has begun to look at exactly how each of the public sector organisations run their procurement operations.

John Dugmore, Suffolk Chamber’s chief executive, said “this is all about maximising the Suffolk pound. Many of the local SMEs I meet mention the difficulties they encounter in hearing about and successfully bidding for public sector contracts in the county.

“This survey gives them the chance to make their concerns and experiences clearly known and the insights from this research will help make the case as to how the public sector needs to open up its procurement processes, so that Suffolk’s business community – and hence the wider Suffolk community - can benefit.”

Stephen Baker, chair of the Suffolk Growth Programme Board, said “public sector organisations spend significant sums buying the good and services we need to provide for our communities.  Where possible we want to buy local by supporting Suffolk businesses to grow and expand, while delivering value for money.  We need businesses to help us achieve this ambition.”

Suffolk Chamber has already sent out the survey to its database and is working with other business organisations to send it onto their respective members and contacts.

Businesses can also access the survey via this link.

The deadline for completing the survey is 24 August 2018.

Suffolk Chamber supports Eastern Institute of Technology proposal

A collective proposal by colleges, universities and businesses to establish one of the Government’s Institutes of Technology in the East has taken a step forward, becoming one of just 16 national projects to move into the second stage of bidding.

The bid to create an Eastern Institute of Technology (EIoT), led by West Suffolk College and New Anglia Local Enterprise Partnership in collaboration with various partners, is a response from local businesses and colleges to identified skills shortages.

Across Norfolk and Suffolk, some 32,000 businesses employ 325,000 people in energy, ICT and digital, advanced manufacturing, agri-tech and construction. Those businesses all need highly-skilled staff to grow and sustain their futures, but research shows that more needs to be done to ensure they have the employees they need into the future.

The Eastern Institute of Technology (EIoT) will focus on those key growth sectors, offering specialist training, access to the latest equipment, technology and to workplace learning.

In addition to developing the skills which businesses need, the EIoT will help to raise levels of aspiration and attainment right across the region, as well as specifically encouraging woman into engineering. The EIoT bid is presented under the shared vision of ‘equality of opportunity regardless of where you live’.

The five colleges working in partnership to develop the bid are West Suffolk College, Suffolk New College, Easton and Otley College, College of West Anglia and East Coast College. The Eastern Institute of Technology would operate from those sites, capitalising on the foundations laid through recent and planned investments in infrastructure and innovative provision, including £10million in a specialist training facility for the energy sector at East Coast College, £6.5million as well as the great facilities at Suffolk New College, Easton and Otley College and at bases within universities and sixth form centres.

The Universities supporting the proposal include the University of East Anglia and the University of Suffolk.

Dr Nikos Savvas, CEO of Suffolk Academy Trust and Principal of West Suffolk College said “It is great honour and testimony to our collective vision to have got through to the next stage. Our proposal for an Institute of Technology for our region will play a key role in meeting employer needs, supplying the highly skilled technical workforce and graduates critical to support growth in ICT, Digital, Energy, Engineering and Agri-tech sectors.  This bid offers the most exciting and significant opportunity to establish The East as a global centre of technology, engineering and science excellence.

“If successful, the hub and spoke model will see EIoT provision delivered at five leading FE colleges across the region and will ensure that it will serve an economy and all communities that span across Norfolk, Suffolk, Essex and Cambridgeshire. This is an incredibly powerful example of the East strategically coming together as one for the greater good.”

Suffolk Chamber’s letter of support can be viewed here.

British Chambers of Commerce recess challenge to MPs

British Chambers of Commerce (BCC) have written in candid terms to MPs, as they begin their recess, urging them to redouble their efforts to listen to businesses in their constituencies and address the practical, real-world questions businesses are facing at a time of unprecedented uncertainty and change.

BCC make the case that businesses urgently need to know, for example, who they’ll be able to hire in future, how they’ll pay VAT, whether their goods will be stopped at borders, and whether the contracts they enter into will be enforceable. Businesses need clarity, precision and reassurance and the longer they wait to understand what the future UK-EU relationship, the bigger the hit to near-term investment, expansion and confidence.

The letter highlights that the BCC Business Brexit Risk Register identifies 22 of the 24 top real-world issues facing businesses as ‘red’ with only two at ‘amber’ reflecting limited progress.

BCC research is also highlighted showing we’re currently in the midst of a mass labour shortage, as firms struggle to find the people they need, and concerns are expressed about the cost of doing business as firms face inflation and wage pressures compounded by poor digital and mobile connectivity, congestion, and ever-higher up-front taxes and costs.

The full BCC letter can be viewed here.

Government review of Local Enterprise Partnerships

New proposals for Local Enterprise Partnerships (LEPs) to supercharge economic growth and drive forward investment in local businesses across the country have been put forward by ministers.

The publication of the ‘Strengthened Local Enterprise Partnerships’ review sees government delivering on its promise in the Industrial Strategy white paper to bring forward reforms to the leadership, governance and accountability of the 38 LEPs charged with kick-starting economic growth and creating jobs in their regions.

The review proposes a number of changes to boost the performance of LEPs, increase their diversity and ensure they’re operating in an open and transparent way. These include:

  • up to £20 million of additional funding between 2018 to 2019 and 2019 to 2020 to support the implementation of these changes and embed evidence in Local Industrial Strategies

  • supporting LEPs to consult widely and transparently on appointing new Chairs and improve board diversity

  • a requirement for women to make up at least one third of LEP boards by 2020 with the expectation of equal representation by 2023

  • a mandate for LEPs to submit proposals for revised geographies including removing situations in which 2 LEP geographies overlap

The Communities Secretary, Rt. Hon James Brokenshire MP, said:

“This publication of the Strengthened Local Enterprise Partnerships policy represents a step change in approach for LEPs. We will continue our work to strengthen these leading institutions to develop ambitious strategies for growth and build an economy which is fit for the future.”

Local Growth Minister, Jake Berry MP, said:

“We’ve committed over £9 billion to help LEPs through 3 rounds of Growth Deals to deliver on their investment priorities, while creating new and exciting economic opportunities for local businesses and communities across the country.

“This landmark shake-up of our local enterprise partnerships will help us deliver on our pledge to deliver over £12 billion through the Local Growth Fund by 2021 while allowing LEPs to use their local knowledge to deliver inclusive growth.”

Doug Field, Chair of New Anglia LEP, welcomed the recommendations in the Review. He said:

“It will allow us to build on our strengths as a business-led, local organisation. It recognises and strengthens our role in setting the strategic economic priorities for our place, convening local partners to deliver projects at pace, generating private sector investment, pitching for government funds and helping local businesses to start and grow.

“Earlier this year, we were rated by government as exceptional in a deep dive of LEPs and we are committed to continuing to reach and exceed the high standards which we set for ourselves around transparency of decision making and programme delivery.”

Brexit White Paper

Commenting on the release of the UK government’s long-awaited White Paper on the future UK-EU relationship, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“At last, businesses have a more comprehensive understanding of the Government's aspirations for the UK's future relationship with the European Union.

“This vision should not have taken two years and three weeks to emerge, but it is nevertheless a welcome starting point for businesses.

"Momentum and pace are now needed to translate ambition into answers to the real-world, practical questions that businesses face. Even with the welcome direction of travel in the White Paper, companies still don't know how they'll be paying VAT, how they can move people between offices, or whether goods will get across borders with a minimum of fuss. It is incumbent on the two sides to work pragmatically and productively on the nuts-and-bolts detail of the future relationship over the coming weeks, drawing on business experience and expertise.

"Time is short - and for businesses, it's results that count."

John Dugmore, Chief Executive of Suffolk Chamber of Commerce also commented:

“Suffolk Chamber is pleased to see that businesses now have a more comprehensive understanding of the Government's aspirations for the UK's future relationship with the European Union.

"Even with the welcome direction of travel in the White Paper, companies in Suffolk still don't know how they'll be paying VAT, how they can move people between offices, or whether goods will get across borders with a minimum of fuss. Momentum and pace are now needed to translate ambition into answers to the real-world, practical questions that businesses face.

"Therefore, Suffolk Chamber will continue to offer support to the wide range of local businesses who are currently exporting, including the latest international trade information, links to business support and a dedicated Brexit resource to help businesses consider the changes that Brexit may bring, and to help business planning at both operational and Board levels.

Following publication of the White Paper, the leading business organisation maintained 22 'red-rated' and 2 'amber-rated' issues on its Business Brexit Risk Register, which brings together the 24 top questions being asked by businesses across the UK. On this, Marshall added:

“Businesses still need clear and detailed answers on many of the practical, real-world questions they face. Many of these answers can only emerge through negotiations - so it’s time for the two sides to crack on and get to a deal. And we have said many times, and will say again, that the UK government must deliver clarity wherever the answers to business questions are entirely within the UK's own control."

The British Chambers of Commerce also urged the UK Government to step up preparations for all eventualities - including 'no deal' scenarios - to ensure that businesses have clarity on how the UK would operate its borders, immigration system and regulations in the event of a breakdown in negotiations. Adam Marshall said:

“Firms need clear guidance from the UK government on preparations for all eventualities, so that they know how critical systems and borders would operate in the unwelcome scenario where a comprehensive deal cannot be reached."

Shared Prosperity Fund

The British Chambers of Commerce have written to James Brokenshire MP, Secretary of State at DHCLG, on the need for clarity on the transition to the UK Shared Prosperity Fund from the European Structural Investment Funds and how it will operate in a devolved nation context.

A copy of the letter can be found here.

British Chambers of Commerce: business alarm on potential Brexit VAT bombshell

Commenting on the passage of amendments to the Customs Bill, which commit the government to fully separating the UK from the EU VAT regime, Adam Marshall, Director General of the British Chambers of Commerce, said:

“This is the first view businesses have on what the VAT regime could be like after Brexit – and it doesn’t look pretty.

“A separate UK VAT system will create significant on-going costs for businesses trading across borders, unless special work-arounds are put in place. This change will pile pressure on Her Majesty’s Revenue and Customs, which is already contending with other facets of Brexit, plus the delivery of a new customs system and Making Tax Digital.

“Firms need to know – now, not in a year’s time – whether and how the government intends to address the potential VAT bombshell facing businesses trading with the EU27 in future. Without a more generous deferment account scheme or postponed accounting, many companies face severe cash flow issues, big new administrative headaches, and a serious loss of competitiveness.”

Under the current system, firms trading with the EU report every quarter on what they have imported and exported, with a VAT bill calculated after. Without clear facilitations, the risk facing business is the need to pay VAT at the point of each cross-border transaction, creating a significant cash flow and competitiveness problem for many.

In the BCC’s Risk Register, questions around Import VAT and Services VAT remain at a red rating.

LEADER Grants Deadline Fast Approaching

LEADER, a DEFRA / EU funded programme, supports prospective rural business start-ups and small businesses.  It aims to support a range of businesses that have identified a need for capital investments, such as buildings or equipment to grow their business.

The last opportunity to submit a first stage grant application is early autumn 2018, click the link below to find out more.

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British Chambers of Commerce: Cut tax complexity and ‘red tape’ holding back businesses

The vast majority of UK businesses believe the cost of complying with the UK tax system has escalated over recent years, according to new research released by the British Chambers of Commerce (BCC).

A survey by the BCC of over 1,100 firms from across the UK found that three in four (75%) believe the overall burden of tax administration and compliance – the HMRC equivalent of ‘red tape’ – has increased compared to five years ago.

The escalating time and resources necessary to comply with the UK’s tax system reflects the need for action from government ministers and HMRC to reverse the burden and complexity of administration, and for more support from HMRC for firms trying to stay compliant.

The results of the survey show that two-thirds (64%) of businesses say that VAT creates the biggest administration and compliance burden, a finding mirrored in the responses of firms of all sizes and sectors. Businesses continue to report confusion over the vast array of rules and rates, suggesting that ministers’ focus should be on reducing the complexity of VAT administration to help boost firms’ growth – rather than tinkering with the VAT threshold.

On top of that, businesses are facing further demands on their time and money to be ready for the introduction of the government’s Making Tax Digital project, which the BCC has called upon ministers to delay until the start of the 2020/21 financial year*. At the same time, companies remain unclear about how the VAT system will function when the UK leaves the EU.

According to the research, PAYE/National Insurance Contributions (54%) and Corporation Tax (41%) were identified as the next biggest sources of compliance burdens after VAT. For many businesses, calculating National Insurance Contributions remains overly complex, with firms facing significant confusion about the thresholds and rates they are required to pay.

While the BCC continues to support the government’s attempts to tackle the aggressive tax avoidance by a small minority of firms, the research shows that there is also a real need to lower compliance costs, transaction costs, and complexity of tax for business. The BCC therefore calls for investment in HMRC’s work on tax evasion to be matched by investment in support for businesses to make compliance easier and improving the processes for collecting tax. There should also be greater independent oversight of all new tax proposals to assess the potential administrative burdens on SMEs.

Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Companies now routinely cite tax administration and compliance, rather than regulation, as their biggest single source of administrative headaches.

“If the government wants its ‘Global Britain’ vision to become a reality, it is time to tackle the huge costs and complexities of the UK tax system, which sap away time and resources that could be better spent raising business productivity and growth.

“HMRC must be given both resources and a clear remit to focus more on supporting, rather than pursuing and punishing, small and medium-sized firms, as they work to get tax right. We want to see more investment in frontline HMRC support that’s geared towards making compliance easier for SMEs. There should also be greater independent scrutiny of new tax proposals with the aim of minimising the administrative burden on business. Making tax administration simpler would provide businesses with more time and headroom to focus on investment and growth.”

Automatic enrolment is an ongoing process – it does not end with your declaration of compliance

Employers across the UK suspected of providing false or misleading information to The Pensions Regulator (TPR) about how they are meeting their automatic enrolment duties, will now be targeted with short notice inspections. 

The latest round of spot checks, due to start later this month, will also target employers who are still non-compliant with their automatic enrolment duties despite penalty action. The inspections will be carried out across the country including Essex, Kent, Hertfordshire, Bedfordshire and Cambridgeshire. 

TPR’s Director of Automatic Enrolment, Darren Ryder, said: “It is an offence for employers to provide TPR with false information on their declaration of compliance, but there are tell-tale signs indicating an employer might not be telling the truth. We can also detect employers who are failing to meet their automatic enrolment duties despite being issued with a penalty and we will take action if we suspect either of these is the case.

The short notice inspections are to detect non-compliance and also to gain insight into employer behaviour. Insight from these spot checks will be included in The Pension Regulator’s annual Automatic Enrolment Commentary and Analysis report to be published this summer.

Make sure you know what you need to do to meet your ongoing duties and that your records are up to date. TPR has online information and guidance about ongoing duties to help you understand what needs to be done.

Post Office Banking Network

The Post Office is working with the banking industry to increase awareness of the services they offer, looking to support citizens with specific needs and incorporating the Post Office as an integral channel for customers to access their banking alongside an extensive range of postal services. This work has caught our attention as they are providing essential banking services that are important for Chamber members and the wider business community.

The Post Office Banking Framework ensures that customers of 28 high street banks can carry out everyday transactions at all 11,500 Post Office branches across the country. They expect significant growth in this area in 2018, as they simplify, standardise and broaden their banking services.

For more information about the work of the Post Office, please see their blog here. The Post Office is uniquely positioned to provide commercial support, particularly to small- and medium-sized businesses, therefore we would appreciate it if you could share this amongst your members to broaden their understanding of the benefits their local Post Office offers.

Government launches £4.2 million Challenge Fund

The Government’s Work and Health Unit, a joint unit funded by the Department for Work and Pensions and Department of Health and Social Care, has launched the Challenge Fund, a new time-limited source of funding aimed at testing new or promising approaches to helping people experiencing mental health or musculoskeletal (MSK) issues to stay in work. They might be at risk of losing their job because of sickness or may be already off work through ill health.

The Fund is squarely aimed at encouraging innovation and ideas with an emerging evidence base. To that end, the Unit is looking to fund small to medium scale initiatives, with £4.2 million available. Applications are welcome from organisations in any sector, including employers, charities, social enterprises, local authorities, health bodies and others, with applications from smaller organisations particularly welcome. The deadline for applications is Friday 17 August. For more information, visit the website.

British Chambers of Commerce podcasts

The latest British Chambers of Commerce (BCC) podcast is now live. In it BCC cover the fallout from the Brexit amendments to the Customs Bill, the impact of those amendments on VAT for business, and interest rates. In the second half Jane Gratton interviews Andy Briggs, CEO of Aviva UK, on how to get the most out of an older workforce.

You can view the podcast here and can subscribe via iTunes or Audioboom.

Apprenticeships I – good practice

With exam results season drawing nearer thousands of young people, influenced by their parents, will be making important decisions about their future. It’s vital that they’re aware of the opportunities that an apprenticeship can provide, to help them make an informed decision about their next step.

Over the summer the Department for Education (DfE) will be working on a series of communications activities to raise awareness of apprenticeships. DfE are already working with the likes of NHS Blood and Transplant, Walsall Council, JCB, Berthon Boats and Superior Seals, and are looking for more employers to help with this.

They are looking for employers that:

  • Have live apprenticeship vacancies in August (for students aged 16-18)

  • Have made apprenticeship offers to students who will be getting their exam results this August

  • Employ apprentices who have recently left school or college, and that have achieved something exceptional that may be of interest to media.

Some examples of great case studies they’ve worked with on include:

  • A successful fashion apprentice who dropped out of a pharmaceutical degree and is now a major designer at a Paris fashion house – and who has designed clothes for Beyonce

  • An apprentice who became the youngest women in the country to qualify as a train operator

  • An apprentice that has become a homeowner at 23 with responsibility for managing a £1million+ project

  • An apprentice who has discovered a new Augmented Reality algorithm – an ‘industry first’

  • An apprentice who successfully overcame a battle with addiction to start training as a plumber

If you fit the bill, please get in touch with Milly Pearson at Munro & Forster Communications milly.pearson@munroforster.com to find out how you can get involved.

Apprenticeships II - Levy

The British Chambers of Commerce (BCC) are in regular dialogue with the Education Secretary, Apprenticeship Minister, BEIS and the DfE Special Adviser over the need to reform the Apprenticeship Levy. BCC have suggested ways in which the rules around access to the Levy funds can be improved to help businesses train more apprentices. The BCC published a 10 point apprenticeship plan for employers and government. Read it here.

Apprenticeships III – Levy transfers

The Minister of State for Skills and Apprenticeships, The Rt Hon Anne Milton MP, has announced that the temporary restriction on how many employers a levy-payer can transfer apprenticeship service funds to will be lifted next month. Read the DfE news story here   

This means that from early July, levy-paying employers will be allowed to transfer up to a maximum of 10% of their apprenticeship service annual funds to as many employers as they choose.

By making a transfer to pay for an apprentice’s training and assessment, employers can support other employers who may not have considered hiring an apprentice before.

Read more about transfers here

Moneycorp paper on future of the pound

Chamber FX provider, Moneycorp has written a paper on what’s in store for the pound in light of the recent Brexit Bill in parliament. Read more about the impact of the vote here.

Employing Disabled People

DWP has announced additional funding for the Access to Work employment support programme, that provides practical and financial support for people who have a disability or long term physical or mental health condition to help them secure a job or remain in work. They can now claim up to £57,200 annually to help pay for: workplace adaptations, assistive technology, transport and sign language services. It can help employers to hire and retain staff. Further information for employers can be found here

Ofqual Consultation

Ofqual is consulting on how they propose to regulate the new Technical Qualifications that sit within T levels, to ensure they are high quality, reliable, comparable, of the right level of demand and trusted. They are interested in all views, and particularly on:

Setting and marking assessments (page 38)

Results and certification (page 30)

Retakes (page 24)

In support of this consultation they are running a number of events, details of which can be found in the accompanying news article.

Economic Update

The latest UK labour market figures revealed that in the three months to May 2018, the number of people in employment rose by 137,000. Unemployment fell by 12,000 over the same period. The unemployment rate currently stands at 4.2%. Average weekly earnings growth (excluding bonuses) slowed to 2.7%, from 2.8%. CPI inflation in the UK stood at 2.4% in June 2018, unchanged from May. UK Public sector net borrowing (excluding public sector banks) decreased by £0.8 billion to £5.4 billion in June 2018, compared with June 2017. Public sector net debt stood at 85% of GDP in June 2018. UK retail sales dropped by 0.5% in June 2018, but sales were up by 2.1% on the three-month-on-three month measure.

British Chambers of Commerce (BCC) Monthly Economic Review

The BCC Economic Review for July 2018 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 upgraded as construction output drops by less than previously estimated;

  • UK inflation holds steady as pay growth slows; and

  • The BCC downgrades its GDP growth expectations for the UK economy.

There is a link to the BCC Monthly Economic Review here.

To discuss these and other policy issues, contact:

John Dugmore on john@suffolkchamber.co.uk
Nick Burfield on nick@suffolkchamber.co.uk