Dorset Chamber Business Policy Watch – May 2019

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Dorset Chamber aims to influence national and local policies that are most relevant to its members interests. This is achieved through the activities of the British Chambers of Commerce (BCC) at the national level, and campaigning and lobbying at the local level and by actively participating in groups such as the Dorset Local Enterprise Partnership (LEP).

The purpose of the table below is to highlight to the Council of Ambassadors the top-10 policy issues, ranging across key action areas identified by Dorset Chamber and the Dorset LEP, to inform Chamber discussions and action, where required.

It is recognised that members’ interest in policy matters will vary considerably depending upon the size, sector and nature of their business.

International Trade & Business

Updated – At the Special European Council meeting on 10 April Donald Tusk, President of the European Council, announced a flexible Brexit extension from 12 April to 31 October. In particular, Donald Tusk begged the UK “Please do not waste this time”. In response MPs in Westminster promptly went on a fortnight’s Easter holiday.

Currently, there are cross-party talks between the government and Labour opposition which both sides have called constructive. It is hard to avoid concluding that even if agreement were possible in theory, it will not be reached in practice. Prime Minister Theresa May will then have to resort to her fallback, another round of parliamentary votes on different options. This time she promises to structure the votes to produce a majority for at least one of them although it is not clear how this will work.

Furthermore, the Brexit extension means that the UK now seems certain to take part in European Elections on 23 May against the wishes of both main parties. While some parties have launched their election campaigns so far the Conservative Party has not announced when its campaign will launch (speculation suggests the date could be 7 May).

For business the uncertainty caused by Brexit continues.

Key dates are:

23 May 2019 – European Elections.

20/21 June 2019 – The EU will review UK progress on Brexit.

31 December 2020 – The EU’s proposed transition period ends, with the UK free to implement its own trade deals with other countries, and free of all obligations to the EU.

1 January 2021 – A new EU-UK free trade deal should take effect, along with special treaty relationships.

Commenting on the Brexit extension Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “With less than 48 hours to go, the prospect of a messy and disorderly exit on Friday has again been averted. Businesses will be relieved, but their frustration with this seemingly endless political process is palpable.” The full BCC statement can be seen here.

For specific business information see:

Prepare for EU Exit

 BCC’s Brexit pages

Business Brexit Risk Register

To sum up the next crunch point for the government will be the European elections on 23 May. Meanwhile, the EU fears that a divided UK lacking a vision and political direction will still not be able to reach an agreement by October. The unending Brexit story seems set to continue.

Recommend Dorset Chamber continues to track progress on Brexit together with the BCC and publicises key information.

New – On 1 May MPs approved a motion to declare an environment and climate emergency. This proposal, which demonstrates the will of the House of Commons on the issue but does not legally compel the government to act, was approved without a vote.

The motion also calls on the government to aim to achieve net-zero emissions before 2050 and for ministers to outline urgent proposals to restore the UK’s natural environment and deliver a “zero waste economy” within the next 6 months.

The declaration of an emergency was one of the key demands put to the government by environmental activist group Extinction Rebellion in a series of protests over recent weeks. At the same time more and more young people are joining the protests.

Dozens of towns and cities across the UK, including London and Manchester, have already declared “a climate emergency”. The Scottish and Welsh governments have both already declared a climate emergency.

There is no single definition of what climate emergency means but many local areas say they want to be carbon-neutral by 2030. Some councils have promised to introduce electric car hubs and build sustainable homes to try to achieve this goal. This is a much more ambitious target than the UK govern-ment’s, which is to reduce carbon emissions by 80% (compared to 1990 levels) by 2050.

The climate change issue is rapidly rising up the political – and moral – agenda and it’s not going to go away. What this means for business and the local economy remains to be seen.

Recommend Council to note.

New – On 27 April the House of Lords Select Committee on the Rural Economy published its report Time for a strategy for the rural economy (235 pages). The report calls on the government to develop a rural strategy and help realise the potential of rural economies.

The Chair of the Committee said: “Rural communities and the economies in them have been ignored and underrated for too long. We must act now to reverse this trend, but we can no longer allow the clear inequalities between the urban and rural to continue unchecked. A rural strategy would address challenges and realise potential in struggling and under-performing areas, and allow vibrant and thriving areas to develop further. Doing nothing is not an option.”

Key recommendations

Key recommendations to tackle the challenges facing the rural economy are:

Rural Strategy

 Issues including the UK’s impending departure from the EU, cuts to local authorities’ budgets, digital connectivity, affordable housing, and an ageing rural population make this an ideal moment for the government to develop a comprehensive rural strategy and to set out its ambition for rural areas

 The government needs to rethink and reform the rural proofing process to ensure that relevant policies and legislation are attuned to the needs of rural communities and rural economies

 Local government and other public bodies should

develop their own local rural strategies consistent with the government framework, and be responsible and accountable for their implementation

Rural delivery and place-based approaches

 For a national strategy and its underlying policies to be effective, it is crucial that they are delivered locally using a place-based approach

 The government must bring forward the consultation on the Shared Prosperity Fund as soon as possible and give much more information on its proposed scope to enable rural businesses and communities to begin planning for the future

 The Fair Funding Review must ensure that rural local authorities are properly compensated for the additional costs of service provision, and that rural areas are fairly treated in future funding settlements

 National and local government should review their procurement policies to ensure that small and local organisations have the genuine ability to bid for the delivery of services

Digital connectivity

 Government should direct Ofcom to conduct a review of the Universal Services Obligation, focusing on what minimum commitment would be needed to sustain and support rural businesses and communities, especially in remoter areas

 Ofcom should also re-assess the £3,400 payment threshold so that rural homes and businesses are not excluded. This must include consideration of home workers and businesses operating from home in remote areas

 Ofcom should review the option of introducing roaming in rural areas to address partial not-spots as a matter of urgency

Housing and planning

 Government should provide a full and comprehensive exemption for all rural areas from the policy to limit affordable housing contributions on small sites

 Government should consider suspending the local authority Right to Buy or making it voluntary for local authorities in specific locations, to ensure that much-needed affordable housing is not lost where it would be difficult or impractical to replace it

 Government should revisit the merits of a spatial plan for England, particularly as it relates to rural areas, to ensure that planning policy operates in a framework where land use priorities are properly considered above the local level

Skills and business support

 The government should review the impact that the revaluation and current multiplier levels for business rates are having on rural businesses and rural rate relief provisions on rural pubs, local shops and other businesses

 The government should investigate whether the current tax system is putting off farmers and rural small businesses from investing in diversification

Local service delivery

 Government should undertake a full review of funding streams to rural public transport. The aspiration should be to develop a “single transport investment pot” that could be used to better support rural transport using a place-based approach

 More needs to be done by government to better understand, track and respond to rural criminality

 Government must ensure that the challenges and costs of providing health services in rural areas are properly reflected in funding allocations to Clinical Commissioning Groups

Government says it will respond to the report in due course. The risk is that in the context of Brexit and reduced government ‘bandwidth’ little meaningful action will follow.

Recommend Council to note and publicise in the newsletter.

Updated – The government’s Growth Deal programme has provided around £98.5m in funding towards projects in Dorset:

 AgriTech Centre – Kingston Maurward College(Completed)

Bournemouth International Growth (BIG) Programme

Eden Portland

Engineering & Manufacturing Project – Bournemouth and Poole College(Completed)

Financial & Business Services Project – Bournemouth and Poole College(Completed)

Former Power Station (Holes Bay)

Gillingham Access to Growth

Innovation Studio – Arts University Bournemouth

Institute of Medical Imaging and Visulisation – Bournemouth  University

Jurassica(Completed)

Lansdowne Business District

Literary and Scientific Institute, Bridport(Completed)

Mary Anning Wing, Lyme Regis(Completed)

Orthopaedic Research Institute Phase 1 & 2

Port of Poole Infrastructure

Quadrant – Dorset Innovation Park(Completed)

Shire Hall, Dorchester(Completed)

Swanage Pier

Wallisdown Connectivity

Western Growth Corridor(Completed)

The latest news from the Dorset LEP concerns the development of our own Local Industrial Strategy. Three business breakfasts were held in April to consult with business and help shape local growth and prosperity.

Representatives of sectors including manufacturing, tourism, finance, the creative industries, and education attended the events in Bournemouth, Shaftesbury and Dorchester.

The strategy is intended to help maximise long-term economic opportunities and create jobs while addressing barriers to growth. The Dorset LEP must compete with other LEPs around the country bidding for government funding so it needs to articulate a clear and distinct vision for Dorset.

More consultation events are planned ahead of a strategy launch in the autumn. For further information about the Local Industrial Strategy see here

Recommend Council to note.

No change – Dorset Gateway is the new central repository of information, advice and support for businesses within the county, providing them with a business support service and signposting to the most appropriate local or national commercial or public funded assistance available to help them grow.

Dorset Gateway offers specialised and bespoke business support including:

Signposting service available in finance, scaling up, start-up support, employment and skills

Professional business account management delivered by Dorset LEP Business Engagement and Dorset Gateway (BEDG) Manager

Custom Broker Service – access point for brokerage to a wide range of business support services in the Dorset county area

Dorset Gateway: Bid Writing Support Services – supporting Dorset businesses to write and submit bids for funding that will enable growth through innovation and contribute towards improving productivity in Dorset

In particular, the DCCI is providing the brokerage service and signposting service under contract to the Dorset LEP. This is a significant development for the Chamber on both a strategic and operational level.

Recommend Council to note and publicise in the newsletter and on Chamber website.

Spatial & Infrastructure Planning

Updated – The current roadworks are part of the £20m Bournemouth International Growth (BIG) Programme to improve the A338 and B3073 corridors. These roadworks are aimed at facilitating better access into and around Bournemouth Airport as well as improving journey times and unlocking employment land at Aviation Business Park and at Wessex Fields.

Around Blackwater Junction on the northbound side, work has been completed on the gas main protection and the majority of the concrete protection barriers. On the River Stour bridge deck new kerbs have been installed and it is now ready for surfacing.

Along the southbound carriageway and the new third lane, work on tidying the verge and finishing the barriers is almost complete. This area will then be hydroseeded (Hydroseeding is an efficient way to plant seeds over a large area in a short period of time).

At Cooper Dean widening works the new concrete drainage channel in the central reserve has been completed. Also, the central reserve has been trimmed ready for new concrete barriers and work has begun on laying the new road surface.

Dorset Council, supported by BCP Council, continues to try and minimise the impact of these works on motorists. For FAQs see here

Recommend Council to note and publicise in the newsletter

Updated – What has been achieved in Dorset? Access to superfast broadband has dramatically improved:

 97.3% of Dorset can access superfast broadband (at least 24Mbps)

 620 structures/cabinets across the county

 84,924 properties can access superfast broadband

 54% of people who can access fibre broadband have taken up the service

Reliable broadband, however, remains a big issue for some rural businesses in parts of Dorset and there is still more work to do.

For further information see Superfast Dorset

Recommend Council to note.

Employment & Skills

New – Official income data suggests that young graduates in England need a second degree to get significantly ahead in earnings.

Graduate earnings figures show that up to the age of 30, postgraduates typically earn £9,000, or about 40%, more than those without degrees. This is double the £4,500 per year gap – about 21% – between those with an undergraduate degree and non-graduates.

The graduate earnings figures for 2018, published by the Department for Education, show that for graduates aged between 21 and 30, the typical salary is £25,500, compared with £21,000 for non-graduates.

These latest official figures show a narrowing advantage for young graduates – the annual pay gap closing from £6,000 between graduates and non-graduates in 2008 to £4,500 and a lower proportion of young graduates in “high skilled” jobs in 2018.

The earnings figures show that pay levels for all levels of education have faced a decade of stagnation and real-terms decline. In 2008, the typical young graduate was earning £24,000 – and by 2018, if it had simply kept pace with inflation, that would have risen to about £31,500. In 2018, however, the typical young graduate was only earning £25,500, representing a significant drop in real-terms earnings.

These national figures for young graduates mask some very wide differences depending on gender, ethnicity and regional jobs markets.

Also, the government has commissioned a review of whether undergraduate fees of £9,250 per year in England represent value for money.

Recommend Council to note.

Finance, Red Tape & Regulation

New – Last month HMRC announced that the deadline for applications for an £8m government initiative to help businesses prepare for EU Exit had been extended to 31 May 2019. This will enable more businesses to benefit from the investment available and provide more time for applications.

The funding is intended to support customs intermediaries and traders completing customs declarations, and can be used to help businesses meet the costs of employee training and IT improvements.

The £8m funding (originally announced in Autumn 2018) was broken down into:

 £2m to fund training for intermediaries and traders completing customs declarations. The grant provides funding for up to 50% of the cost of training staff

 £3m in IT improvement funding, available to small and medium sized employers in the customs intermediaries sector currently completing customs declarations on behalf of importers and exporters. The grant funds investment in software that increases the automation and productivity of completing customs declarations

 £3m was invested to increase training provision. HMRC provided the funding to service provider Knowledge Pool which engaged with training providers to increase the number of courses available and develop new courses to support customs broker training

 Earlier HMRC announced that in the event of no deal, importers using Transitional Simplified Procedures (TSP) could postpone doing customs declarations for 6 months from the date the UK exits the EU

Recommend CE and Council to note.

Special interest item

Updated The 2 new unitary authorities, Bournemouth, Christchurch and Poole (BCP) Council and Dorset Council, successfully launched on 1 April 2019.

The new BCP Council replaces the former borough councils (Bournemouth, Poole and Christchurch) which no longer exist. Similarly, the new Dorset Council replaces the former district and borough councils (East Dorset, North Dorset, Purbeck, West Dorset, Weymouth and Portland) and Dorset County Council, all of which no longer exist. These 2 new unitary authorities are responsible for delivering local services across the area.

BCP Council will consist of 125 members and Dorset Council will have 171 members. At the time of writing (3 May) the local election results are awaited.

Recommend Council to note

Ian Cambrook

Pidela Consulting Ltd