News

Last week, the Government announced its plans to postpone checks on imported food and fresh products arriving from the European Union until the end of 2023 due to the current rise in inflation. As food prices continue to rise, the extra costs from new checks on meat, fish, dairy and other products would fuel inflation, increasing costs for businesses and the general public.

The new import controls were due to begin in July, starting with requirements for animal products for human consumption, germinal products and animal by-products not for human consumption.

Sara Williams, CEO of Staffordshire Chambers of Commerce, said: “Over the last nine months, UK trade with the EU has remained stubbornly flat due to the impact of Brexit and the significant challenges that businesses across the nation have faced. By introducing new checks on imported foods from the EU, it is likely that our exports to the EU and imports from the EU will be damaged further.

“Chambers across the network will welcome the delay, especially as we see the Government recognise the difficulties that firms are currently facing. However, it is now essential that all food checks and associated paperwork between Europe and Great Britain are removed by ensuring that there is a negotiated agreement on rules for trade in animal and plant products.”

Brexit Opportunities Minister, Jacob Rees-Mogg explained the importance of having the right import controls regime in place, stating that the UK should have a “safe, secure and efficient” process of importing goods from the EU.

William Bain, Head of Trade Policy at the British Chambers of Commerce, said: “Given current economic circumstances, it’s sensible to postpone the implementation of import food checks. Customs checks on goods and increased paperwork have damaged our exports to the EU, particularly from smaller businesses.”

As the Minister has delayed the checks on imported goods from the EU for the fourth time, it is now critical that the EU-UK trade deal and Cooperation Agreement is revisited in order to deliver a long-term trading solution suiting both parties.

The current crisis in the cost of living has meant that firms are already facing higher costs due to the war in Ukraine as well as the rising energy prices. Therefore, by postponing the checks on imported goods, the Government have removed the further burden which would be placed on firms across the UK. We now urge the Government to address both the cost-of-living crisis and the cost of doing businesses crisis in order to support our firms to grow and invest further.

If your firm requires support in navigating the post-Brexit trading landscape, you can call our switchboard on 01782 202222 or email Rhouda.elalfy@staffordshirechambers.co.uk.

The latest figures released this week by the British Chambers of Commerce show the pressure on firms struggling to recruit staff remains at record high levels. The data for the leading business group’s Quarterly Recruitment Outlook survey for Q1 2022 was drawn from a survey of 5,500 businesses.

Attempted recruitment in Q1 was down slightly with 60 percent looking to recruit staff (64 percent in Q4). However, the proportion of firms reporting difficulties filling roles remains at a historical high at 78 percent, dropping just one percentage point from the previous quarter (79 percent).

The hospitality sector was facing the most challenging recruitment issues, with 85 percent, reporting difficulties, up from 83 percent in Q4 2021. This was closely followed by construction on 83 percent, logistics on 81 percent and manufacturers at 80 percent.

Retail and wholesale firms were the least likely to report difficulties at 69 percent but the proportions of firms that cannot find the staff they need remains worryingly high.

Views from Business

Firms reported a broad range of issues which contributed to the overall recruitment squeeze – this included disruption due to Covid and a drop in the availability of foreign staff. More firms are also reporting that wage competition is proving disruptive.

One medium-sized professional services firm in the West midlands reported: “We are finding it difficult to recruit all levels of staff. Applicants can choose between several employers as we are all chasing the same people. They feel we are on the edge of the Midlands but still expect Birmingham salaries.”

The owner of a small hospitality firm said: “We are prepared to pay more for the right people, but there just seems to be no one to employ. If we cannot get staff our service slips drastically because we don’t have enough people to serve our customers.”

It’s now harder than ever for businesses to fill job vacancies and there are no signs of improvement. In an increasingly tight labour market, competition for skills is ramping up wage costs, leaving many firms unable to recruit the people they need.

When combined with the escalating price of energy, shipping, raw materials and other costs, it is a precarious situation for businesses.  Inevitably, it is the smaller firms, with little in the way of cash reserves after two years of the pandemic, who are most exposed to the risk all this presents.

The UK government needs to take concrete action to address labour shortages as they are a key factor in the economy’s stuttering recovery. If firms cannot get the people they need then productivity and revenue are two of the first casualties.

Government must also ensure that people can access rapid retraining opportunities for in-demand jobs at all skill levels in the workforce.  At the same time, where there is clear evidence of national shortages damaging the economy, we need temporary visas for hard working people willing to come to the UK to work in the essential everyday roles that we all rely on.

Businesses are investing more in developing homegrown talent – and creating a more inclusive and diverse workforce – but this won’t solve pervasive skills shortages overnight.  Right now, the priority must be to improve access to skills and ease the wider cost pressures facing business.

If you have any issues around recruitment or would like to join our HR, Employment and Skills Forum, please email Suzanne Quinn: suzanne.quinn@staffordshirechambers.co.uk

Entries for the 2022 Staffordshire Chambers Business Awards close at 5pm on Friday 6^th May.

Staffordshire Chambers Business awards are a great opportunity for you to spotlight your business and get recognition for your work during the last 12 months. Shortlisted businesses receive invaluable coverage in local press and across social media and will be invited to a gala evening celebration on 14th July. There are 15 award categories and one of the winners will also be crowned as overall Business of the Year.

Entry details and award categories and sponsors: www.staffordshirechambers.co.uk/awards

If you want to talk to us about any business issues, including funding, you can call our switchboard on 01782 202222 or call the Stoke and Staffs Growth Hub Helpline on 0300 111 8002 or email: info@staffordshirechambers.co.uk

I don’t know about you, but I am ready for the Easter break.

The Office for National Statistics (ONS) inflation figures coupled with the labour market statistics for April are both breaking records for the wrong reasons.

You can view the latest figures here: Home – Office for National Statistics (ons.gov.uk)

On Wednesday inflation data was released and as expected figures confirm that the UK is in the midst of an unprecedented inflationary surge amid accelerating global price pressures, including those from Russia’s invasion of Ukraine, leading to inflation figures we haven’t seen for 30 years.

Unsurprisingly March’s rise in inflation came from the increasing cost of housing and household services, including higher utility bills, rising fuel prices and more costly second-hand cars.

We are likely to see even worse in April, with the increase in the energy price cap and the reversal of the VAT reduction for hospitality likely to push inflation above eight percent.

The upward pressure on energy and commodity prices from Russia’s invasion of Ukraine will drive consumer prices higher for longer with inflation forecast to peak close to 10 percent later this year, following the expected energy price cap rise in October.

Soaring inflation has therefore raised the prospect of a notable slump in economic output in the near term by weakening consumer spending and damaging firms’ finances and their ability to invest and grow.

The Government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses, and an SME energy price cap to protect smaller firms from some of the price increases.

Now, on to the employment figures which are highlighting the nationwide hiring problems that firms are facing.

While payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce.

The increasing number of vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may hamper economic activity.

Although there was a rise in earnings growth, with inflation soaring, wages are still comfortably lagging behind price increases. If this continues as expected, real household incomes will be damaged further, stifling consumer spending, a key driver of UK economic output.

Weakening consumer confidence may limit households’ willingness to support spending by running down savings built-up during Covid to offset declines in real pay.

The deteriorating economic outlook and the financial squeeze on businesses from soaring energy bills and the national insurance rise risks weakening labour market conditions by dampening recruitment and limiting firms’ ability to increase wages and invest in their staff.

More must be done to help people access rapid retraining opportunities for in-demand jobs, including assisting older workers to turn to more sustainable jobs. Introducing a new skills tax credit to incentivise employers to invest in training for workers would help to revitalise employer-led training.

You can be assured that Staffordshire Chambers, along with the British Chambers of Commerce (BCC), will be keeping up the pressure on ministers to act to offset rising costs and invest in the jobs market.

And finally, a reminder that entries for the 2022 Staffordshire Chambers Business Awards close at 5pm on Friday 6^th May.

Our awards showcase and celebrate the best business talent in Staffordshire with a variety of award categories that cover everything from new start-up businesses to multinational corporations – as well as awards for individual employees.

It’s a great opportunity for you to spotlight your business and get recognition for your work during the last 12 months. Shortlisted businesses receive invaluable coverage in local press and across social media and will be invited to a gala evening celebration on 14th July. The entry process is simple and streamlined and you can enter as many categories as you like.

There are 15 award categories and one of the winners will also be crowned as overall Business of the Year.

For entry details and a full list of award categories and sponsors click here: www.staffordshirechambers.co.uk/awards

If you want to talk to us about any business issues, including funding, you can call our switchboard on 01782 202222 or call the Stoke and Staffs Growth Hub Helpline on 0300 111 8002 or email: info@staffordshirechambers.co.uk

Last week, the government announced a new 2022 Energy Strategy aiming to accelerate the transition to renewable energy sources such as new nuclear, hydrogen and wind power which will help to secure stable and affordable British energy in the long term.

Within the strategy, the government have prioritised the development of nuclear power, promising to deliver up to eight reactors by 2030. Additionally, planning reforms will be implemented in a bid to accelerate the approval for new offshore windfarms, and hydrogen production will be doubled, aiming to provide low-carbon energy for industry, power and transport.

As all UK Covid restrictions were removed earlier in the year and the global economy reopened, there was a huge surge in demand for everything from new cars to international holidays, which as a result drove the spike in demand for oil and gas, leading to the dramatic increase in the price of fuel. This was also accompanied by Russia’s invasion of Ukraine and as the price for gas is set internationally, Putin’s restrictions on the supply of Russia’s gas to the European market has pushed prices up further.

The increase in the cost of fuel has meant that the cost of living in the UK has also increased, putting many families and businesses under a lot of financial pressure, especially as gas is used to generate electricity as well as heat the majority of UK homes.

The government’s energy strategy is a step in the right direction towards helping businesses and households reach the net-zero targets, however the ten-point delivery plan is heavily focused on the future of renewable energy sources in the UK and does little to help businesses with the current record-high energy prices.

Whilst we welcome Boris Johnson’s statement regarding ‘reducing our exposure to volatile fossil fuel markets’, the strategy is a missed opportunity to announce support for businesses to help them overcome the soaring prices, such as introducing a temporary SME Price Cap or an expansion on the energy bills rebate scheme to include SMEs.

Sara Williams, CEO of Staffordshire Chambers of Commerce, said: “The long-awaited strategy has outlined some key areas that when implemented will change the future of British energy. The investment in eight new reactors alongside the increased investment in offshore wind, solar and hydrogen are crucial in order to enhance energy security and meet net-zero targets. However, it is important to note that this strategy is heavily focused on supply and is a long-term plan, which means that the current issues being faced by firms and households will remain.

“The strategy fails to mention energy efficiency and insulation, both of which will provide immediate cost reductions when installed. We would have welcomed further encouragement of the delivery of the cheapest forms of renewable energy in order to help us support businesses in the net-zero journey. It is now essential that the government continue to provide a clear plan and provide funding in order to increase the momentum on the drive to net zero.”

You can visit our Environmentally Conscious Staffordshire Campaign page for more information on what you can do to reduce carbon emissions and increase your business efficiency here: https://staffordshirechambers.co.uk/environmentally-conscious-staffordshire/