Policy Update 23rd May 2023

Welcome to this week’s policy update.

Please do get in touch with me, [email protected], if you’d like to discuss any of the following, or other business issues. And remember to keep highlighting specific examples that we can use in lobbying activity – they are really effective, as you’ll see below from the Bank of England.

Our Quarterly Economic Survey for Q2 2023 is now collecting responses. The survey plays a vital role in informing the Bank of England Monetary Policy Committee, government, and others, and has real impact on things like interest rate decisions. Please take 5 minutes to respond here: https://www.surveymonkey.co.uk/r/33VYS67.

The draft employer needs section of this year’s Local Skills Improvement Plan is available to view at here. This builds on the Emerging Priorities shared in March. If you have any comments please email [email protected] by 9am on Friday 26th?May.

We're hosting a series of network lunches with some of Cumbria's MPs. These events?are great opportunity to discuss the issues that matter to you and meet, network and forge relationships with other businesses.

John Stevenson MP for Carlisle,?the Halston Hotel on Friday 26th May

￡37 +vat (member rate) ￡49 +vat (non-member)

Book here

Tim Farron MP for Westmorland and Lonsdale,?the Belsfield Hotel, Bowness on Windermere on Friday 9th June

￡37 +vat (member rate) ￡49 +vat (non-member)

Book here

The British Chambers of Commerce (BCC) Global Annual Conference last week was a great event, with tremendous opportunities at and between the following for networking with Chambers, businesses and others!

The afternoon before the conference, Chamber chief executives from throughout the UK and international Chambers got together for a global working session, focussing on the issues and opportunities of climate change. In the evening there was a reception, including speeches by Shadow Chief Secretary to the Treasury the Rt Hon Pat McFadden, Kevin Hollinrake MP, and Group Exec Director of BSI Pietro Foschi.?

At the conference itself, following a welcome by BCC Chair, Sarah Howard, and arousing opening speech from Shevaun Haviland,?there was a presentation from Chancellor Jeremy Hunt MP, followed by an “in conversation with” and questions from the floor. He talked about the challenges of dealing with inflation, his intention of making the full inflation allowance permanent, workforce challenges and support for innovation and growth in key sectors such as clean energy and advanced manufacturing.

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Solange Chamberlain, Chief Operating Officer, NatWest spoke about building British business and Emma Gilthorpe, Chief Operating Officer of Heathrow spoke about achieving growth in aviation alongside achieving climate change targets. Lindzi Boyd of One Earth inspired the room on organisations with purpose.

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Andrew Bailey, Governor of the Bank of England, not surprisingly, spoke about the economy, as part of this highlighting the genuine value to them of insights from the Chambers’ QES and from the individual stories they hear speaking with businesses around the country, and which they really do raise in Monetary Policy Committee discussions.

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Breakout sessions covered skills, the economy, climate and trade.

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It was great to hear such support for business in the closing keynote speech, “in conversation” and questions from the floor from Leader of the Opposition, Sir Keir Starmer MP.?This included plans for a reformed planning system, scrapping and replacing business rates, a more flexible skills funding and a reformed apprenticeship levy.

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This was followed by a closing speech by Chamber President, Baroness Martha Lane-Fox.

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It would be great for you to join us next year, so please save the date for our Global Annual Conference 2024 - Thursday 27th June.

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Similarly, why not join me at the business leaders’ reception with Rachel Reeves MP and Jonathan Reynolds MP on 8th June, 18.30-20.30 in Manchester. The reception will be a chance to set out the contribution businesses play in generating jobs and economic growth both regionally and nationally and discuss how Labour can work with business to deliver on their economic mission to deliver the highest, sustained growth in the G7. Please note: Only those on the guest list will be admitted to the event. This event is for those at C-Suite and Board level only. If you’d like to be put forward for an invitation please email me, [email protected].

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The BCC team continue to be out and about meeting government, and others, on your behalf. Last week the members of the team at attended a meeting of the Treasury’s Finance Council, met with the Help to Grow Gov.uk Hub Team and were briefed by government officials on the progress of trade negotiations with India. This week, BCC Director General, Shevaun Haviland, is presenting the work of the Business Advisory Group to a meeting of the Climate Change Committee and meeting Paul McComb, incoming Executive Director of the British Chamber of Commerce in Hong Kong. She is also meeting with Department for Business & Trade Minister Kevin Hollinrake and the Prime Minister’s Business Adviser. On Wednesday, Shevaun Haviland and Baroness Martha Lane Fox CBE, will be speaking at the Congress of Business (COB) Summit hosted by Glasgow Chamber of Commerce. Members of the BCC team will be meeting on Thursday with Shadow Secretary of State Lisa Nandy's Political Advisors and on Friday with the Department for Education.

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Trade negotiations with Switzerland to upgrade the current goods trade-only deal with the UK were launched last week. You can read BCC’s reaction here: SWISS TRADE NEGOTIATIONS A KEY STEP FOR UK SERVICES (britishchambers.org.uk).

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Also last week, the European Commission announced major reforms of its customs processes intended to simplify rules for EU SMEs. You can read more here: EU Customs Reform (europa.eu).

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UK export performance was weak in the first quarter of 2023 according to the latest Office for National Statistics data covering March 2023. You can read more here: WEAK FIRST QUARTER FOR UK EXPORTS (britishchambers.org.uk).

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Thanks as ever to Ginny Murphy, Cumberland Council, for the May Labour Market Briefing which contains the claimant, employment and payroll data released by ONS this morning together with the latest available data on NEETs, job postings, business start-ups and business performance.

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Key headlines for Cumbria are:

• There were 221,819 residents in payrolled employment in April, a decrease of 310 from last month but 1,590 more than a year ago.?
• Median payrolled earnings for Cumbrian residents were essentially unchanged from last month but are 8% up on a year ago.
• There were 7,225 claimants actively seeking work in April, a fall of 85 from March, in contrast to a small rise in claimants nationally.?The count fell in Allerdale, Copeland, Eden and South Lakeland, was unchanged in Carlisle but rose slightly in Barrow.?The claimant rate is unchanged at 2.4% which is well below the national rate of 3.8%.
• There were 36,000 claimants of Universal Credit (UC) in April (seeking work, working, not available for work), a rise of 481 from March with rises in all three main claimant groups and in all 6 former district areas.?The overall UC claimant rate was 12% which is below the national average of 14.5% but the rate was above the national average in Allerdale and is above the national average for younger age groups in Allerdale, Barrow and Copeland.
• The number of households in receipt of Universal Credit was 30,644 in February (household data has a time lag compared to data for individual claimants), this was up by 1,822 from a year ago.
• There were an estimated 26,230 children/young people under the age of 20 living in UC households in Feb 2023 which is 2,757 more than a year ago.
• There were 361 young people classed at NEET in March 2023, up by 46 from February, giving a rate of 3.5% in Cumbria compared to 4.8% nationally.?The highest NEET rate was for young people in Barrow where it was 4.7%.
• There were 10,168 active online job postings in April 2023, 1,117 more than in March, continuing the trend of increasing activity in Cumbria which is counter to the UK and NW trends where volumes are falling.
• There were 606 small business start-ups in the quarter ending March 2023 which is 137 more than last quarter and 64 more than the same period last year.
• There were 30,642 active companies on the FAME database at the end of April, 60 more than in March and there were 175 businesses newly recorded as dissolved/in liquidation during the month.
• Of the active companies, 6.6% had posted results showing a 10% increase in employment and/or turnover in their most recent account whilst 4.4% had posted results showing a 10% decline.
• In April there were 2,656 companies with a financial red flag on the Red Flag Alert system, a further 16 had 2 red flags and 3 had 3 red flags.?The number with red flags rose by 69 from last month but is almost 500 lower than a year ago.?However, the number of “gold” rated businesses has fallen for the 3rd consecutive month with most dropping into the bronze category which may indicate early signs of increased financial stress showing in the data.

Key national headlines are:

• Payrolled employment decreased by 136,000 at UK level in April compared to March, the first fall for just over two years.
• The UK employment rate was estimated at 75.9%, up 0.2ppt than the previous quarter but still 0.7ppt lower than before the pandemic.
• The UK unemployment rate (which includes non-claimants unlike the local data) was estimated to be 3.9%, an increase of 0.1ppt from last quarter but 0.1ppt lower than before the pandemic.
• The UK economic inactivity rate (those not working and not available for work) was estimated to be 21%, 0.4ppt lower than last quarter but 0.8 ppt higher than before the pandemic.?The decrease in the quarter was largely driven by those aged 16-24 years while those aged 50-64 increased.?ONS reports that the number inactive because of long term sickness has increased to a record high with mental health issues among younger people and musculoskeletal issues on the rise.
• The number of vacancies fell for the 10th consecutive period although it remained higher than before the pandemic (NB: the national data is drawn from a business survey unlike the local data which is taken from online job boards).
• Annual growth in average total pay (including bonuses) was 5.8% and in regular pay (not including bonuses) it was 6.7%.?However, when adjusted for inflation total pay fell by 3% and regular pay by 2%.
• There were 556,000 working days lost due to labour disputes in March 2023, up from 332,000 in February.

Suzanne