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Brexit is still hurting businesses but can Jeremy Hunt's election budget help UK economy?
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Oct 7, 2024
On this week’s episode of Bonds & Ballots, City A.M.'s chief city reporter, Charlie Conchie, sat with the Director General of the British Chambers of Commerce, Shevaun Haviland, who laid out what the business group wants to see in Chancellor Jeremy Hunt’s budget on the 6th of March. She warns of the impact of Brexit and lays out the need for green investment in the UK and the importance of positive immigration to the economy. Read more ⬇️ https://www.cityam.com/sunak-must-strengthen-eu-relations-as-brexit-friction-hurts-firms-top-business-body-warns/ Get more of City A.M. 👇 🌐 http://www.cityam.com X(formerly Twitter): http://twitter.com/CityAM Facebook: http://www.facebook.com/cityam Instagram: http://www.instagram.com/city_am LinkedIn: http://www.linkedin.com/company/cityam #brexit #ukeconomy #business #businessnews #uknews #greeninvestment #investing #investment #bcc #immigration
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0:00
Business. That famous phrase in Boris Johnson captured the at-time's
0:06
frosty relationship between the private sector and politicians and exposed the tendency of the two to often pull in different directions. Businesses require a
0:15
voice in Westminster. Companies need to have their message and demands reflected in
0:19
policy and often it falls to membership bodies to have the ear of top politicians
0:24
to make that case for them. I'm Charlie Conchee Chief City Reporter at Cityam and
0:28
today we are sitting down with Chabroval. Raun Havelin, the Director General of the British Chambers of Commerce, one of the country's
0:33
top business bodies, to hear exactly what the BCC wants from Westminster in the run-up to an
0:38
election and how it is engaging both sides. The BCC has just laid out a long list of demands to the Treasury ahead of the budget on March
0:46
to 6th. We're going to be hearing from Chavon on exactly what the BCC is asking for and some of the
0:50
details behind those are. So let's go and hear what she has to say. Thank you for coming in to City Amtowers to join us on, bonds and ballots
1:04
Great to have you in. Thank you. Pleasure. I wonder if we could. This is obviously a series all about the relationship between business and Westminster
1:12
Just to look back on, you've been in the role for two and a half years now. Two and a half fairly tumultuous
1:17
Some things have happened. Yes. And just whether you could give us a sense of the mood of your membership at the moment
1:24
You obviously represent thousands of businesses around the country. Is there still as much negativity as there has been
1:30
be seeing some glimmers of positivity potentially creep back in. So I joined two and a half years ago, so May 21
1:38
If you remember, that was Boris's sunny up plans. We had a little bit more COVID to deal with in that Christmas
1:45
and some big challenges for the hospitality industry. Rising inflation, of course, Ukrainian war
1:55
Like the energy bills were off the scale. and then, you know, a few prime ministers on the way
2:01
So it hasn't been the most straightforward of times for business, of course
2:07
What are we seeing? So we run the quarterly economic survey. It's the UK's biggest private sector survey, about 6,000 businesses a quarter
2:16
So last quarter, so end of the calendar year, what do we see
2:21
We did see some uptick in confidence. So it's sentiment survey, so how people are feeling, which is a good
2:28
sign. We have yet to see that being translated into investment intentions. So, and that's what
2:35
we really need to see. We need to see business investing for the future. At the moment, they're feeling
2:40
still, you know, with inflation, energy prices, you know, tight labour market. Margins are tight. So
2:48
businesses is still a little bit in, you know, I think wait and see mode. That's interesting. It's
2:52
not being actually reflected in the date at the moment. So is this just the hope that we might see
2:57
you know, inflation looks like it's staying fairly steady at the moment, maybe coming down
3:01
rates starting to come down. Is that just sort of hopefully looking ahead towards the rest of the
3:05
year then? Yeah, I think it is. I think businesses are on that side, they're hopeful because
3:10
obviously inflation is going in the right direction, although static as of this morning
3:14
But it is the number one concern for businesses, and it's been the number one concern for 10
3:19
quarters in a row, and that's the first time it's been number one concern in 30 years. So it is
3:24
with interest rates a close second. So we absolutely want to see both of those going in the downward direction
3:32
At the same time, of course, we have a general election. I'm sure that has not passed by anyone's attention
3:38
And that adds a little bit more noise into the system. But economically, hopefully the indicators are looking positive
3:46
It is an interesting one. When you think of, you know, you meant at the start, several prime ministers have passed in the time over the past two and a half years
3:52
do businesses, do you think they look at a general election coming down the track with some dread
3:58
Does that just mean more change, more uncertainty, more turmoil succumbed, do you think
4:04
Look, it does mean more change and businesses thrive when they have certainty and clarity
4:10
that helps you, you know, businesses invest in a long-term view, probably longer than a political cycle for sure
4:17
So, you know, clarity, certainty is the thing that businesses want to give them, you know
4:22
confidence to invest. We knew a general election was coming. You know, we'll work around it
4:28
In terms of how that actually affects your role as well, you've obviously, I can't even tally
4:32
up how many in my head now, but we're coming into another one now. Does that affect and have
4:36
a massive impact on the channels of communication between, you know, a big business body like
4:40
the British Chambers of Commerce and government? Have you always found there to be over the past
4:45
two and a half years? A useful two-way dialogue there has it seemed shut at times when Westminster's
4:50
feeling a bit more insular and inside itself? No, no. The government has always been very open to hearing businesses views Even Liz Tras and Carting in there Well Quasi if you remember was business secretary before he was Chancellor
5:07
So he'd been hearing from me on a weekly basis until he got that gig
5:12
And of course, Rishi, before he was Prime Minister was Chancellor, and we used to see him regularly
5:18
So, you know, Westminster Whitehall definitely rightly open to hearing from business
5:24
we all have to remember that what we want is positive economic growth and that's what government
5:30
want to. And, you know, our view is it's crucial to work in really close partnership together
5:37
Businesses have been having a tricky time. Government, of course, have a very tight fiscal envelope
5:42
as it were. So the best way to get us back to economic growth is to work in a really close partnership
5:49
And on partnership as well, you've obviously now this year got the dual sort of
5:53
of balancing act of courting, discussing and engaging with the Labour Party as well as the Government
5:59
Can you just talk to how has that engagement been with the Labour Party? Are you seeing those
6:03
lines of communication perhaps a lot more open than they were, say, four years ago as well
6:08
So we are on a political organisation. Our job is to talk to parties of all colour and make
6:15
sure that the UK is the best place to start, grow and invest in a business. That's our job
6:20
So we continuously talk to both the government and the opposition. Clearly, as a general election looms, there is more activity
6:31
And Labour have done a lot of hard work and engaging with business and listening to business
6:37
We have been giving them the views of our members too along the way just as we do with government
6:42
And it's important that everybody is listening. And on the bigger picture of the voice of business in Westminster
6:49
bodies like the British Chambers of Commerce obviously have a big role in that and it's been
6:53
you know a slightly tumultuous year on that front as well we had the scandal with the CBI has that
6:58
been detrimental to all business voice in Westminster as well have you seen a knock-on impact of how
7:03
that affects you or you very much you know for lack of a better word sort of seeing the benefits
7:08
in terms of membership growth and so on and a weightier voice when you're talking with government
7:12
and the Labour Party so look you know what happened around the CBI
7:19
was terrible for everyone concerned. And obviously our first thought was always with those women involved
7:25
And, you know, my understanding is there's still investigations ongoing. So, you know, that should be the focus
7:31
And those people who, you know, lost their jobs along the way. At the same time, for those businesses that decided to part ways with the CBI
7:41
it's a crucial time for business to have representation. Business need their voices heard
7:47
We're very close to a general election. So, you know, and really it's important, whoever you are, CBI, BCC, you know, for FSB
7:57
We all work together. It's important for business to have a choice, have a choice of representation
8:02
And, you know, many businesses were members of their chambers and the CBI. So, and the CBI seem to be making, you know, a comeback
8:11
So it's important that business have a voice and the choice is theirs, I guess
8:15
And on the voice, you know, you've come out quite strongly today with your sort of list of calls to the chance of what you're like to see in the big spring budget coming up
8:26
And I think the term you used was a sustainable growth plan. You talked about a partnership between business and government
8:31
Can you actually just take us through the specifics there of what a sustainable growth plan actually means in policy terms
8:38
Yeah, absolutely. So, you know, I think we all collectively need to do a good job of explaining that a
8:47
that thriving businesses and a strong economy mean more jobs. That means more taxes are paid into the chancellas coffers, and that means we can pay for teachers
8:58
and nurses. So, you know, the importance of a thriving, humming economy is, is clear
9:05
government, I've had a hard time. Fiscally, businesses have. We need to work in partnership to make sure that we're, you know, getting to that point together
9:15
So that was our, you know, that's how we're thinking about going to talk to the Chancellor about the budget
9:24
We have five kiosks in that. And the number one was around what our business is telling us, a big issue they have on planning
9:32
Now, the Chancellor did some great stuff in the office. The autumn statement, this takes it a step further because what we're saying is we business want to build a fund, a three million pound fund, to help train more people to become planners
9:47
Because it's a bit of resource issue in local authorities that is short of people. So we want to train people to come planners and we asking government to ring fence funds for local authorities to employ those people in the local authorities for these two years after they been trained So I mean planning is an interesting one because I sure for many business people it
10:08
seems like running into that, you know, slight sense of bureaucracy that is stopping them
10:12
from doing things and bringing the private sector in as a solution. Is that a sign that
10:17
it's maybe, you know, not working in the public sector's hands? Does it need the private
10:22
sector to step in and just get things moving slightly for lack of a
10:26
better term? Well, I think what we saw is government acting in the autumn statement around ensuring
10:32
that the processes that local authorities have put in place are more transparent and a bit speedier
10:40
But again, it's still a lack of resource. There's just not enough people to literally see these
10:45
processes through. So our idea with government is to say, how can we help that? It's not just all
10:51
about business knocking on the door of government and saying, you need to do this and this. It is up to us to step in
10:56
and work in partnership together? And there's two interesting points as well
11:00
I want to just touch on within the submission, one being the relationship with the EU
11:05
and perhaps a slightly interconnected point, I'll let you tell me otherwise if so
11:10
but on skills as well. I think the point on EU you're saying
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you know, you've told the chance of that we do want to see a closer relationship with the EU
11:20
I think, you know, you point to some of the impact that your members have suffered as a result of
11:25
you know, trading break, and tougher customs rules to navigate. How bad, looking back four years now from us leaving the EU
11:34
how bad has that impact actually been on businesses around the country? Yeah, yeah
11:39
So we obviously knew it was going to be difficult at the beginning, a whole new set of rules
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but we thought the businesses, once they'd implement those, would sort of get used to it
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But actually that hasn't happened. So in our TCA three years on document
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that we published every December of 23, which, you know, ruins Christmas
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We did some more research. 60% of businesses told us that they're still having challenges with the rules
12:08
And 80% told us that they don't know what rules changes are coming in the future
12:15
And we know that we have import rules coming in in, well, last month and April
12:19
So still a huge amount of uncertainty. The EU is our biggest trading partner
12:24
So 42% of our trade goes to the EU. It is crucial that we start making some of this easier for business
12:33
Trade is, if you think about it, you know, we are one country
12:37
Trading with the rest of the world and the EU, you know, that's a whole other size of market, right
12:43
Only 10% of UK businesses export. That's too low a number. 60% of chamber members export
12:52
We are very good at helping people do it. but we need to work with government to get past some of those challenges
12:59
The Windsor framework has really sort of, I think, helped the tone a great deal in dealing with the EU
13:06
I was over there in November meeting some of the commissioners. And I think there's some political will
13:11
Of course, they have elections this year too. So, yeah, we want to see a bit more political will to make some changes
13:18
sort of practical, realistic changes that will help smooth that transition. On the political world so far, there has been some positive noise, some acknowledgement that this can't go on, the status quo can't continue there
13:31
Yeah, and then we want to see more of that. And we have suggested to government and the opposition a number of sort of practical steps they can put in around improving particularly food and drink paperwork
13:44
So at the moment, if you send a hamper to the EU, you have to have a different piece of paperwork for every item in that hamper
13:51
I mean, that's a lot of work and probably doesn't make it work you're while sending it
13:56
So food and drink products, for example, on mobility, on professional qualifications
14:02
Those are some of the things that we hope we can move things on with the EU. And then just coming on to the skills point as well, that's a sort of challenge facing every business from the city to Scotland at the moment
14:14
So many businesses, I think in your survey that you've just done, it was three quarters of businesses struggling to hire at the moment
14:21
vacancies. What is the actual short-term fix there? Because obviously we can look at training skills
14:27
those for like multi-year projects. Is there anything that can be done in the short term? What are
14:32
the fixes in general that we can look at on the skills front? Yeah, yeah. I mean, it is the number
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one thing that businesses talk about. It's so challenging. And again, it is stopping them expanding
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where they want to. In the very short term, so there are about 2.5 million people who are
14:49
economically inactive, long term, sick. We need to work hand and glove with the government
14:55
to help get people back to work who want to come back to work And that going to take some time And there some great stuff out there in terms of getting people back to work around boot camps We need to do more of that
15:10
We also need to, I think, look at our immigration system. So I think that's what you were talking
15:16
about referencing perhaps earlier. We, you know, we have a net immigration of 700,000 people
15:26
but yet we still have nearly a million open headcount. So that would suggest that maybe those two things are not working as well as they might together
15:36
So more skills-based immigration system? So a lot of that number is students, right
15:44
And so obviously they're not necessarily part of the workforce. But we have the shortage occupation list in place
15:50
We have the migratory advisory committee. We want them to look at the economy and say, okay
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what do we need in our economy and therefore what sort of immigration do we need
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to match that? When you know those numbers there on the vacancies when you hear sometimes the tone of the debate
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when that 750,000 is sort of slapped there as a completely indisputable negative, do you
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find that frustrating? Is that sometimes the practicalities of business getting lost in just
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politicking? Does that annoy you slightly? Does it annoy your members? Do you sense
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some frustration there? I think there's a there's a conversation we all need to be having as a nation that's a little bit more nuanced
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than 750,000. That's bad. Because you know, like a large number of that is students. There are
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visas in there that we have given rightly so to Ukrainians, to the Afghans, to those in Hong Kong
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So that's the majority of those numbers. And that is all sort of agreed immigration. The question
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then is, how are we helping our economy with immigration? Because at the moment
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it clearly isn't working and we need to have that conversation. And just finally on the, I know your and the chamber are very vocal champions of sort of green
17:04
investment and what the future holds of the green economy in the UK
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Are you let down slightly to see a softening on both sides, Labour and the Conservatives at the
17:15
moment on some of those green investment plans? Would you like to see a bit more, you know, financial and emotional backing to those almost
17:25
So, look, the climate challenge is a huge global issue. Without the planet, there is no profit
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We need to get this right. And for business, it's sort of two sides
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So on one hand, how are we helping our businesses to get to net zero
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And that means energy efficiency, which means hopefully they'll be saving money
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On the other side, it's there are huge opportunities for UK PLC and new green products
17:55
and services in innovating this space. I mean, we were world leaders in offshore wind fairly recently
18:02
Contracts for Difference was a great policy framework to help drive that market
18:06
What are we doing in that space to make that happen? So we would like to see the green economy, green transition at the centre of all parties' plans
18:16
because it's the economy of the future. And just final, if we zoom out a bit, we in the city can probably be criticised in the
18:25
same way as Westminster sometimes of being slightly too centric, not getting, thinking around the
18:29
country enough. What are the exciting developments? What are the things that you see in the
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network that sometimes pique your interest and say we should be looking at this? This is an area of
18:38
the future. Yeah, yeah, great, great question. So the best bit of the job is travelling around
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the country, meeting businesses from, you know, Inverness to Penzance. And, you know
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despite businesses laying out the challenges that they're having, rightly so, invariably, they
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turn around and say, but you know what, Sean, I'm growing this part of my business over here
19:01
I'm launching a new product, or I'm hiring people here. I mean, they are innovators, can do
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solution-orientated people, and that is what we need to be bottling and turbo-charging
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And that's what I say to the city is, you know, as a country, we have huge assets around, you know
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our universities, we're innovators, we're entrepreneurs, and of course the city, the city of London
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as a financial centre, how are we using that all together to drive our economy across the country
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Shavuwen, thank you very much for joining us. Thank you. There you have it. There are some of the asks of the British Chambers of Commerce to government
19:37
and to the Chancellor in the run-up to the budget on March the 6th and indeed the election
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at the end of this year. Skills, trade, closer ties with the EU, all high on the agenda there
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What do you make of those calls from the BCC? Let us know in the comments below and
19:50
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