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• UK GDP in Q4 2011 fell 0.3% on the quarter; revised down from previous estimate of 0.2% fall

Commenting on the revised GDP figure for the fourth quarter of 2011, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The revised GDP figure for the fourth quarter is disappointing, with most analysts expecting the ONS to confirm its previous estimate of a 0.2% fall. The downward revision is largely due to the new estimate that the service sector fell by 0.1% on the quarter, with the ONS previously suggesting that services were unchanged. Although the fall in investment was much smaller than expected, the improvement in net exports was not as strong as we had hoped.

“The UK economy faces huge challenges, but we still believe that GDP has returned to positive growth in the first quarter of 2012 and there will be no new recession. But the austerity measures and unresolved problems in the eurozone will continue to put pressure on the economy, so it is crucial that policies to support growth are put at the top of the agenda.

“The recent Budget has not done enough to benefit small- and medium-sized businesses. More must be done as a matter of urgency to help firms create jobs, export and invest. While the government perseveres with measures to reduce the deficit, priorities must be reallocated within the overall spending envelope. The credit easing programme needs to be made more substantial, and the MPC must ensure that the QE programme encourages increased lending for smaller firms. Ministers must also look seriously at prospects for the creation of an SME bank.”

Commenting on the government’s decision to move ahead with crucial reforms to planning laws, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“This country’s impossible planning regime has for too long prevented our development and growth. We have said that without reform, businesses will shelve development projects, and our economy will lose out on crucial inward investment from overseas.

“Business will warmly welcome the government’s decision to push ahead with planning reform. If implemented properly, the new National Planning Policy Framework could give companies greater clarity and certainty when looking to expand. It will also allow planning to be restored to a positive tool, rather than a weapon used to fight reactionary battles against change, growth and jobs. Ministers must ensure that the new system works for companies of all sizes, whether in urban centers or rural idylls, North and South.

“The opponents of planning reform have been voluble in recent months. They have said there’s no need to change the planning system – but the evidence from good businesses trying to expand proves them wrong. The BCC’s own research shows that the complexity, cost and inconsistency of the current system discourage demand from companies that want to grow. That in turn limits economic growth. So a failure to reform the planning system would not just be a blow to business’s bottom line. It would also undermine Britain’s ability to pay for the public services we all want to see.

“No one in business wants to concrete over the countryside, damage the environment, or allow reckless and poor development. Businesses understand the need for planning to promote sustainable and responsible growth. But in its current form, that system limits even the most modest expansion, tying companies up in red tape, heaping costs upon owners and discouraging firms from applying in the first place.”

On the ‘presumption in favour of sustainable development’:

“We welcome the government’s decision to maintain a presumption in favour of sustainable development at the heart of the new system. This presumption will encourage growth while retaining the environmental safeguards that have long been part of the British planning system. It will also provide a powerful incentive for local authorities to complete their local plans to guide growth if they do not already have one in place.”

On the use of brownfield land first:

“The reinstatement of a ‘brownfield-first’ approach clarifies the government’s original intention in the draft. While we broadly support this change, local authorities must work to ensure this supports future business growth. An adequate supply of commercial land must be maintained.”

On the greenbelt:

“Local authorities must be careful not to score an own goal by putting too much protection around greenbelt land, some of which has little amenity value and could be better used to provide jobs and homes. Our cities require an adequate supply of land for commercial development, and in some cases this may require making the tough choice to use close-by greenbelt areas, rather than see environmentally-unsustainable development many miles away.”

On implementing the policy:

“We welcome the additional detail on how the changes will be implemented. But government and local authorities must work hard to provide certainty and consistency for businesses looking to expand over the 12-month transition period.”

BCC research shows:

• 70% of applicants had to pay for planning support during the application process, demonstrating the system’s complexity and cost
• 21% of businesses that needed planning permission but did not submit an application said it was because of negative perceptions of the planning process, demonstrating discouraged demand
• Of those that considered applying but did not, 44% said their decision damaged their plans for growth or constrained output, demonstrating negative economic impact
• 65% of those who had applied for planning permission in different parts of the country said that they received different advice across local authorities, demonstrating inconsistency and complexity
• Over half (53%) of applicants said that when a decision on an application is finally reached, it runs contrary to the advice of expert planning officers. This shows that under the current system politics too often trumps the need for growth.

Commenting on the threat of a strike by fuel tanker drivers, Caroline Williams, Chief Executive of Norfolk Chamber of Commerce said:

Norfolk is a rural county and relies heavily on access to fuel, add in the fact that Norfolk has a high percentage of small to medium size businesses and it shows that a fuel strike could be very detrimental to businesses large and small. – Caroline Williams

“Norfolk employers are working flat out to keep their businesses afloat and deliver growth during challenging economic times. The last thing they need to contend with is a fuel strike, which could have a damaging effect on their businesses. Norfolk is a rural county and relies heavily on access to fuel, add in the fact that Norfolk has a high percentage of small to medium size businesses and it shows that a fuel strike could be very detrimental to businesses large and small.

Not only will firms struggle to access the goods they need to run their business, staff won’t be able to get to work, and smaller companies will be forced to shut down and lose takings. Public services could end up being affected, and parents who can’t get childcare will have to take time off and lose pay. Furthermore, many Norfolk jobs depend on sending goods to ports and markets overseas.

“People have already started panic buying, which will lead to further shortages and make the problem even worse. For this strike to go ahead would be totally reckless. With the Queen’s Jubilee and the Olympic Games only months away, the world’s eyes are watching the UK and any decisions to strike will only tarnish our reputation to global investors.”

The government today launched its National Loan Guarantee Scheme, which is intended to help businesses with a turnover of less than £50m access funding more cheaply.

The guarantees will apply to new term loans, hire-lease arrangements and refinancing of loans (where the term amount has changed). Please see the attached information from the government, designed to help businesses understand the scheme. Currently, the banks participating in the scheme are RBS, Lloyds, Santander, Barclays and Aldermore (further banks may join).

More information can be found here.

If you have any questions, please contact Steve Hughes

Further information can be found in the below PDF’s