Tag: British Chambers of Commerce

Chancellor vows to work in partnership with business ‘to fix the foundations’

The Chancellor ‘ushered in a new era of business partnership’ yesterday (29 August) as she met business groups together for the first time as Chancellor.

Rachel Reeves told senior business leaders that just as they had worked together in opposition to write their plans for government, they will work together now to deliver them.

In her first meeting with the BCC, CBI, FSB, Make UK and IoD as Chancellor, she said that businesses will be at the heart of delivering the government’s growth mission, as it takes action to fix the foundations of the economy to rebuild Britain and make every part of the country better off.

Ahead of October’s Budget, Reeves promised to ‘co-design’ policy with business on shared priorities to boost growth, pointing to the same approach being taken for designing the National Wealth Fund. 

She pledged to establish a new British Infrastructure Council to advise government on how to support more investment into UK infrastructure projects, and work closely with business to bring down barriers to growth and investment.

Reeves told senior business representatives the Treasury’s door was always open to valuable business insights on the opportunities and challenges they face. 

She added that the Business Secretary is committed to the new Industrial Strategy Council having a strong business voice and is also consulting with business on the details on Plan to Make Work Pay.

Business representatives also gave their views on what a successful partnership with government could look like and areas to prioritise to help their members grow and invest. 

Speaking after the meeting, Chancellor of the Exchequer Rachel Reeves said: “Under this new government’s leadership, I will lead the most pro-growth, pro-business Treasury in our history – with a laser focus on making working people better off. 

“That can only happen by working in partnership with businesses: big, medium and small. I want to continue the strong partnership we built with business in opposition now we are in government to deliver on our shared goal of fixing the foundations of our economy, so we can rebuild Britain and make every part of the country better off.”

Stephen Phipson CBE, CEO of Make UK, the manufacturers’ organisation said: “The Chancellor promised that she would engage properly with business and today was more evidence that the promise is being honoured.

“It was very welcome to have the Chancellor highlight further progress in delivering an Industrial Strategy with assurances that the governing Council would have a strong business voice.  

“In order to build confidence for businesses to increase investment, it is critical we keep this momentum going and see more detail on the delivery as well as vision. UK Manufacturers are fully behind the government’s growth agenda and look forward to working in partnership with government to achieve it.”

Shevaun Haviland, Director General of the British Chambers of Commerce said: “Today’s meeting was a valuable opportunity to reaffirm our commitment, on behalf of the businesses across our Chamber network, to work in partnership with Government. 

“We outlined our priorities for the Autumn Budget, recognising the public finance challenge. Boosting economic growth and investment is crucial, while maintaining a fiscal environment that protects the UK’s business competitiveness. 

“We welcome the Chancellor’s pledge to work with us on plans for an industrial strategy and to boost infrastructure investment. 

“We look forward to more discussions with the Chancellor and the Treasury team ahead of her statement on October 30th”

Tina McKenzie MBE, Federation of Small Businesses Policy Chair, said: “Today’s meeting was a crucial partnership moment, and I was pleased to raise issues and growth ideas from FSB members up and down the country, in every local community.

“You don’t get growth, jobs or wealth creation without UK small businesses; this was a core feature of our discussions in Opposition.  

“Now as the Chancellor and her team turn to the Budget, the diversity of UK businesses – 99% of which are the small, micro or self-employed that we represent – needs reflecting in Government policy-making just as much.”

CBI CEO Rain Newton-Smith said: “Businesses are the engine of growth and will be central to achieving the government’s mission to boost the UK economy. It’s why the CBI welcomes the Chancellor’s promise to co-design policy with the business community.

“Together, we can find shared solutions to shared problems – to increase productivity and business investment – in turn, improving living standards.

“The CBI is proud to work in close partnership with the Treasury, providing a cross-economy voice to help remove the roadblocks holding back investment and sustainable growth.”

Jonathan Geldart, Director General of the Institute of Directors, said: “For the government to successfully deliver its growth mission, it will be crucial that it works in partnership with business.

“Therefore, we look forward to building on the productive relationship that we have developed with the Chancellor, to ensure that the priorities and challenges of businesses and entrepreneurs are understood and acted upon.

“Specifically, as we approach her first Budget in the autumn, we are calling on the Chancellor to take time to get policy design right for the long-term, to deliver the stable tax and policy framework needed to support business confidence and investment.”

Edinburgh College named regional Planet Saver in British Chambers of Commerce Awards

Edinburgh College has been named as a regional Planet Saver award winner in the British Chambers of Commerce Business Awards and will now compete for a national prize. 

The College was entered into the UK-wide awards scheme having collected the Net Zero Champion accolade at the Edinburgh Chamber of Commerce Business Awards in February this year. 

The awards programme is a showpiece event in the UK business calendar, recognising and promoting the best of British business through a series of regional heats, culminating in a campaign to showcase winning businesses on an international stage.

The College’s success comes in recognition of its renewed commitment to Sustainability and increasing engagement with its student body through a Go Green project led by Edinburgh College Students’ Association (ECSA) and the introduction of an annual Sustainable Education Week. 

ECSA’s work involved creating Go Green Hubs on each campus, which feature Clothes Swap Shops and Community Fridges, and are aimed at reducing food and textiles waste, alleviating poverty and keeping the issue of Sustainability visible and at the forefront of students’ minds. 

Sustainable Education Week sees classes across the curriculum focus their teaching on Sustainability, with students embarking on new projects or one-off activities which embed one or more of the UN Sustainable Development Goals into contextualised learning.

Edinburgh College Principal, Audrey Cumberford said: “We’re delighted to have been named as a regional winner by the British Chambers of Commerce. 

“This award and progression into the next round of the programme is a wonderful recognition of the work of our College in engaging students to support, drive and lead our sustainability priorities, working towards achieving the goals set out in our Environmental Sustainability Strategy. I am extremely proud of what our staff and students involved have achieved and I believe they truly deserve this recognition.”

Al Wilson, ECSA Director, said: “Well done to the College and in particular our brilliant team members for this latest award recognition. 

“Our Go Green project has delivered tangible outcomes in terms of reducing literally tonnes of food and textiles waste, as well as raising awareness of sustainability among the student body at Edinburgh College – something which is vital to help us tackle the climate emergency and make it real for our students as they become the workforce of tomorrow.”

Recovery weakening as inflation worries soar, says British Chambers of Commerce

  • 58% of firms expect their prices to increase in the next three months, the highest on record. 66% of businesses cited inflation as a concern, also a record high
  • 1 in 4 (27%) firms were worried about rising interest rates, as concerns over rate hikes among manufacturers reach record high
  • Just under half of firms (45%) reported increased domestic sales in Q4, compared to 47% in Q3

The BCC’s Quarterly Economic Survey (QES) – the UK’s largest independent survey of business sentiment and a leading indicator of UK GDP growth – has shown the recovery stalled in the fourth quarter, with firms facing unprecedented inflationary pressures.

The survey of almost 5,500 firms showed that some indicators also revealed a continued stagnation in the proportion of firms reporting improved cashflow and increased investment. Inflation is the top issue for firms, while a rise in the interest rate was also a cause for concern for many.

Business activity

45% of respondents overall reported increased domestic sales in Q4, down from 47% in Q3. 16% reported a decrease, unchanged from Q3.

In the services sector, the balance of firms reporting increased domestic sales dropped to +26% in Q4, from +31% in Q3.

In the manufacturing sector, the balance of firms reporting increased domestic sales was +22% in Q4, down from +28 in Q3.

Prior to the surge in Omicron infections, hotels and catering had been most likely to report increased domestic sales (55%). This represented the beginning of a potential recovery as the sector was also the most likely to report decreased sales throughout the rest of the pandemic. 

94% reported decreased sales and cash flow at the start of the pandemic in Q2 2020. Worryingly, a similar decline is now possible in the face of the Omicron variant and the implementation of Plan B which led to new restrictions for some.

Unprecedented Inflationary Pressures

58% of firms expect their prices to increase in the next three months, the highest on record. Only 1% expected a decrease.

The percentage expecting an increase rises dramatically to 77% for production and manufacturing firms, 74% for retailers and wholesalers, 72% for construction firms, and 69% for transport and distribution firms. These are the highest on record.

When asked whether firms were facing pressures to raise prices from the following factors, 94% of manufacturers cited raw materials, 49% cited other overheads, 30% cited pay settlements, and 13% cited finance costs.

When asked what was more of a concern to their business than three months ago, 66% of firms overall cited inflation (compared to 52% in Q3 and 25% in Q4 2020), the highest on record. For production and manufacturing firms, this rises to 75%.

Concerns over higher interest rates rise sharply

The percentage citing interest rates as a concern rose in the quarter. 1 in 4 firms (27%) reported interest rates as a concern, up from 19% in Q3.

The percentage mentioning interest rates as worry among manufacturers stood at 28% in Q4, the highest seen since the metric was first collected in Q4 2009 and up from 21% in Q3.

The percentage citing interest rates a concern among service sector firms stood at 29% in Q4, the highest seen since Q3 2014 and up from 22% in Q3.

Little recovery to Cash Flow

For firms overall, 31% reported an increase to cash flow, while 46% reported no change and 23% reported a decrease.

Given these figures were reported before the full impact of Omicron and the introduction of Plan B, this metric is a cause for concern, as some firms are still struggling to recover from large scale losses incurred since the start of the pandemic.

Most firms still not investing

Investment in plant, machinery, or equipment also continued to flatline in Q4, with 29% overall reporting an increase, while 60% reported no change, and 11% a decline. This was largely unchanged from Q3 and Q2.

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: “Our latest survey suggests that UK’s economic recovery slowed in the final quarter of 2021 as mounting headwinds increasingly limited the key indicators of activity.

“The persistent weakness in cash flow is troubling because it leaves businesses more exposed to the economic impact of Omicron, rising inflation and potential further restrictions.

“The record rise in price pressures suggests that a substantial inflationary surge is likely in the coming months. Rising raw material costs, higher energy prices and the reversal of the VAT reduction for hospitality are likely to push inflation above 6% by April.

“The notable uptick in concerns over higher interest rates underscores the need for the Bank of England to proceed with caution on further rate rises to avoid undermining confidence and an already fragile recovery.

“The UK economy is starting 2022 facing some key challenges. The renewed reluctance among consumers to spend and staff shortages triggered by Omicron and Plan B may mean that the UK economy contracts in the near term, particularly if more restrictions are needed.

“Rising inflation is likely to limit the UK’s growth prospects this year by eroding consumers’ spending power and squeezing firms’ profit margins and their ability to invest.”

Responding to the findings, Director General of the British Chambers of Commerce, Shevaun Haviland, said:  “Our latest survey paints a challenging picture for the UK economy as we start 2022.

“Many businesses were facing a struggle to improve their cashflow and raise investment even before the Omicron variant surged and Plan B was imposed.

“Supply chain disruption is continuing to persist, inflation is soaring, and rising energy costs are presenting firms with a huge headache.

“With companies now having to grapple with the impact of Omicron and further changes to the rules on imports and exports of goods to the EU, there are significant hurdles for businesses in the months ahead.

“The Government has listened to our previous calls for support, and it must do all it can to steady the ship and steer the economy through these uncertain times. If the current restrictions persist or are tightened further then a more comprehensive support package that matches the scale of any new measures, will need to be put in place.

“The focus must be on creating the best possible environment for businesses to grow and thrive. By supporting firms, they can begin to generate wealth, create jobs and support communities.

“That is by far the best way to sustainably deliver the tax revenue the government needs to support public services and the wider economy.”

Coronavirus: ‘A Time To Be Bold’

British Chambers of Commerce President, Baroness Ruby McGregor-Smith, has written an open letter to the Prime Minister setting out principles for a phased restart of the UK economy.

The leading business group set out its integrated approach, the first step in a three-stage process,as the government prepares to ease initial lockdown restrictions.

The letter reads: “The fight against the virus must remain the top priority, but the planning and communication of a carefully phased approach to lifting lockdown must begin immediately if we are to harness the public health and economic benefits, both now and in the future.”

Praising the work of Chambers of Commerce across the UK as the “first responders” of the business world, the letter is accompanied by detailed policy proposals for safely reopening the economy, comprising steps to:

  • Safely reopen public spaces and restore services (including schools and public transport)
  • Safely reopen workplaces and commercial spaces
  • Minimise job losses and business failures
  • Rebuild supply chains and customer bases; and
  • Put the UK economy on a high-growth, high-wage and low unemployment trajectory as soon as possible

The letter continues: “This is a time to be bold. Government should not shy away from sustaining high levels of public spending in order to restart and renew our communities and the economy in the short and medium-term, while not tying the hands of future generations.

“An expansionary fiscal policy, including a commitment to transformative infrastructure investment, will be needed in order to generate the returns that will help to pay down the national debt in the longer-term.

“We see the journey ahead as having three phases:

  • Restart: a phased reopening of the economy
  • Rebuild: building resilience for firms and households
  • Renew: returning to prosperity and growth

“We plan to share some principles for each of these three phases over the coming weeks, beginning today with ‘Restart’.

“Fundamental prerequisites to beginning this journey include mass testing and contact tracing; clear decisions and guidance on what PPE is needed in workplaces; and proactive steps to ensure adequate supply of PPE to both the health service and to businesses where necessary.”

The letter welcomes the “speed and scale” of existing government support schemes and indicates that they will need to “continue to evolve to support a phased restart of the economy, enabling businesses to survive through this crisis and thrive in the future.”

The letter concludes: “We commit to working with you and your colleagues across Government on exploring these phases in detail as we plan our path forward. We owe nothing less to our businesses, and the communities and people they support, who have been battered by this storm.”

20-05-01 Letter from British Chambers of Commerce