Inflation down, interest rates stay; business hopes grow

Mark Carney, Governor of the Bank of England, brought some sunshine into lives across the United Kingdom with news of the economy’s growth, lower inflation and declining unemployment.

Downsides to this news — and we have to consider them — is that growth, lower inflation and rising employment should herald a change to the very low interest rates that have helped to mitigate against inflationary pressures that we’ve had over the last few years.

The question I’m interested in is — on behalf of all businesses here in Hertfordshire — when will the Bank of England raise the interest rate? The Governor was clear that the Bank will consider a rise when unemployment falls to 7 per cent. When’s that likely to be? There is some speculation that this will be mid 2015, but perhaps a more realistic expectation will be end 2016.

There is so much riding on rising interest rates, available cash for investment, current productivity levels and household cash for spending in the economy.

What will this mean for local businesses? In a Bank of England briefing to East of England businesses a few days ago, its East of England agent, Phil Eckersley, pointed out that the lending to SMEs was contracting at a faster rate than previously; a concern for the Bank. For smaller businesses however, there has been slightly cheaper financing; credit costs have improved for them.

Business investment and intentions are showing signs of improving. Our export prospects look quite good, despite a recent dip. But we’re still not exporting our way out. What could damage our export prospects is the strengthening of the Stirling on world money markets.

New employment growth is easing back; businesses are beginning to mop up capacity to improve productivity. Companies are expecting output to increase and demand for employment to outstrip jobs. Hopefully this will be a short-lived trend, particularly here in Hertfordshire.

Wages have seen no real change. Private sector earnings are subdued; bonuses are lower too. Prices are likely to rise, but this won’t affect wages.

We are consuming more than we’re earning. This means we’re saving less, which itself means we are feeling much more confident about the future. One indicator of this is the strengthening new car market; we’re rewarding ourselves now.

For household borrowings, which affect money flow into the local economy, there have been some cheap deals on personal loan rates. Housing affordability is a key factor, and while there has been rumour of a housing market bubble in response to Help to Buy initiatives, it is thought that this is highly unlikely; although hotspot overheating might occur in one or two places, such as London.

Britain might be an island, but we’re not immune to less positive recovery headwinds from other continents. Here in Hertfordshire, we must actively encourage micro business ambition, help SMEs where we can pursue finance options such as capital grants and to recruit from the local labour pool, and constantly find ways to create jobs for school leavers.

Exporting is good for Hertfordshire!

Whilst the UK economy is facing challenges at home and aboard the service sector will be the main driver of Britain’s recovery, whilst the manufacturing sector continues to struggle. However as many firms have maintained their skill base and with further support during the recovery, particularly for exporters, the manufacturing sector will gradually continue to rise.


However findings from BCC’s recent skills gap report, cited that gaps around knowing how to take a product to market is holding back potential exporters.

We believe commercial export skills should be central to business education, and help guide entrepreneurs through essential areas of managing finances, cross border supply chains, understanding legal and bureaucratic requirements. The survey also found language skills will be critical to the success of exporters, and currently very few speak the language of their buyer sufficient to do a deal.

Whilst French remains the most commonly spoken language, of 5000 businesses interviewed only 5% had technical French language skills. As the UK continues to drive up exports, and reduce the balance of payments deficit, this is going to be more of a problem. In faster growing markets such as China and Russia, 95% of businesses have no skills in these languages, and yet according to an IMF forecast China will grow by an estimated 7.75% and Russia by 3.4% (IMF)

There is a real need to heighten the importance of languages in the curriculum and skills agenda, and create the next generation of business leaders to be born global, and for businesses to have more incentives to train staff in languages relevant for their International trade.

The Chamber movement has been going for over 200 years, providing businesses with practical support, access to knowledge, skills and encouraging exports through our export seminars, workshops and export documentation and translations services.

For help and advice on export seminars, Country awareness and export documentation please email export@hertschamber.com

You have to be in it to win it!

With just over a week to go until the deadline for our 2013 Inspiring Hertfordshire awards, we are getting very excited about discovering some new centres of business excellence, outstanding individuals and showcasing some amazing talent in the County!

For some experienced award winners, it isn’t just about delegating the task of completing of a form, and hope and see, it’s part of a strategic journey to showcase the organisation as an excellent employer, and or outstanding company to do business with, or to gain recognition for outstanding performance and achievement. This not only gains a huge amount of publicity, leading to new business opportunities but also plays a significant role in attracting the cream of talent, and boost confidence and morale internally. For SME’s that may find they really haven’t got the time, we learnt from finalists last year in the same position who claimed by investing time into the business, to analyse where it had come from, what it had achieved this year, and more importantly the vision for the future, was worth every penny in time.

What was evident was the consistent approach across all the finalists and winners in how outwardly facing they were in the local community, with board level commitment to engaging with the local community, building local relationships with schools, and local charities, and embedding a culture that fosters supporting local prosperity. Whatever category the finalists and winners entered there was a clear vision for growth in this area, they weren’t merely reacting to local opportunities but had a clear business plan and strategic objectives for raising customer excellence, or growing International trade , and even a KPI for winning awards.

If you haven’t yet downloaded your entry form, there’s still time, www.hertschamber.com and we are delighted to have the support from leading businesses across the county as 2013 sponsors and judges;

Server Choice, Smart source, Ashridge, Goldsmith Centre, Breeze and Wyle’s UH , Exemplas, Simply health, Aldwyk Housing, and Cllr Sharon Taylor, Locality budget and Stevenage Borough Council, and Dacorum ‘Look No Further’ sponsoring our new Tourism Award.

I hope 2013 will be an Inspirational year for Hertfordshire businesses and hope we will have the opportunity to showcase many of you at our awards dinner on the 16th May, at Porsche Hatfield, and wish you further success in the Comets’ own Hertfordshire Business Awards launched later this year.

Father Christmas?? No, I dont think so either...

Economic growth, the ‘holy grail’ how, or who, will make it happen? Government, the Banks, perhaps it will be Father Christmas? No I don’t think so either. Certainly the Government and Banks have an important part to play and, depending on their actions, they are likely to have an effect, whether it be positive or negative remains to be seen but, at the end of the day, there can be little doubt that it is only businesses and their customers who will turn the economy around.


Depending on your point of view one might argue that we should welcome Government initiatives such as those designed to remove red tape, reduce onerous planning conditions and to enable small businesses that are struggling to obtain finance from an increasingly risk averse banking sector. Though, it will take time for benefits to become apparent every little helps. Red tape impacts disproportionately on small growing businesses and many are deterred from expansion as a result of concerns, real and imagined, with the planning system. I am also very aware of the Banks claims to ‘have plenty of money and are eager to lend’ but in truth I have seen no evidence to suggest that such claims are being translated into action.

Those of us who are a bit longer in the tooth will remember the days when banking was about locally based people who understood local businesses and were prepared to manage risk not, as seems to be the case today, to eradicate it entirely. Time will tell if the Governments initiative makes a difference but, whatever the merits, I suspect that very few people are expecting the ‘complete’ solution.

In the past the answer was easy, throw more public money at it, sadly there isn’t much left. Nonetheless, there appears to be some being made available to parts of the country where unemployment and other issues remain a consistent problem no matter how much money is lavished upon them. This might make some social sense but in reality it is highly questionable as to whether the impact is anything other than short term. Perhaps it is time to take a different approach, how about reducing the amount of money being poured into these areas, where without incentives businesses are reluctant to locate, to create jobs that have all the sustainability of a chocolate teapot. Instead, what about investing it in areas that are able to produce long term benefits that are likely to be economically sustainable for some time to come?

Where should the Government invest our money? Where it will have most effect of course? How about places like Hertfordshire? Places where businesses want to be; places where good long term jobs can be created; places which have the communication and transport links that are essential to success in the global economy. Taking funding, as we have historically done, from areas that are generally successful and pumping it into areas with a track record of failure might deliver short term social benefits but in the long run, from a business perspective, makes no sense at all.

The other essential part of the equation requires encouraging customers to spend money, raising the taxes of those who are able to do so won’t achieve this nor will maintaining some of the other barriers that discourage them from doing so. Half hearted efforts to ignite the housing market for instance will not work if, in this part of the world at least, stamp duty remains at current levels. Why move from one asset that is not accruing in value to another when the cost of doing so is added to by high levels of indirect taxation.

Clearly the Government is not in a position to start flinging cash, nor can it afford to choke off regular income lines, but surely with a little imagination there are actions that could be taken to encourage consumer spending without adding further pressure on the National Debt.

The removal of stamp duty; extending the National Insurance holiday on small businesses taking on new staff to include this part of the country; using some of the enormous amounts of business rates that are collected here and spent elsewhere to accelerate business growth and encourage research and investment in areas that are able to sustain it; might provide fertile ground in the search for solutions. Clearly the decisions of Government are difficult and challenging but to paraphrase what a wise man once said ‘if you keep doing the same things expecting different results you are likely to be very disappointed’. Actually he said that this was a definition of madness but you know what I mean.

I hope we continue the glow of optimism that was created by the Olympics, if we replicate that in the economy we will surely see the benefits feeding through into productivity and job creation

As the old song goes ‘the party’s over’ but, ‘is it time to call it a day’? Apart from the curmudgeonly few, most of us will have viewed the Olympics and the Paralympics as inspirational events demonstrating the very best in human endeavour and a magnificent illustration of just what can be achieved with goodwill, ingenuity and a massive amount of hard work. Of course the athletes were the stars of the show but it was a show that, in the words of Lord Coe, was ‘made in Britain’.


Prior to the event, if one was to believe a fraction of the publicity being purveyed by the doom mongers the whole thing was going to be a disaster riddled with incompetence and scarred by bad planning. According to the more dire predictions we were on target to produce an occasion that would live long in the memory for all the wrong reasons. I daresay they are lining up as we speak to undermine the legacy too.

We have learnt many things from the Games. We have learnt that the British public will turn out with enthusiasm to support something that is run according to the highest professional standards. We have learnt that individuals can, in the face of tremendous odds, rise to all sorts of challenges. We have learnt that as a country we can do great things. We have learnt that, when all is said and done, we Brits really do enjoy success whilst simultaneously being able to apply perspective when things don’t work out quite as we would have hoped. The trick going forward will be to apply these lessons.

Business people have, of course, always known that if you create what people want and it is of good quality and sold at the right price people will buy it? Business people face challenges everyday but the vast majority have developed the ability to resist and overcome them come what may. Great things? Business people have been doing them for years providing jobs and income for themselves, their families and their employees. No one ever succeeded in business without understanding the need for a good product, tremendous effort and the requirement for somewhat more than their fair share of resilience. Most have developed a good understanding of success and failure and found a way of living with both.

The Olympics may not have been great for everybody but as a nation I believe we gained a variety of benefits, probably some of which we are yet to be identified. Legacy? I really hope that we build on the success of our athletes and support them and those who aspire to emulate them. I hope too that we recognise the importance of our business folk and the herculean effort many have put into overcoming tremendous odds. Finally, I hope we continue the glow of optimism that was created, if we can replicate that in the economy we will surely to see the benefits feeding through into productivity and job creation.

The Government didnt cause the current problems but as they are in the driving seat they need to do something about it...

As yet more statistics hit the street proclaiming further economic gloom and doom some of us, me included, are inclined to scratch around for straws of comfort rather than to simply accept the implications of the evidence that some would say is staring us in the face. Burying our heads in the sand? Maybe, but on the other hand what’s to be gained from burying our heads in our hands? In any case, is relying upon these traditional indicators of financial health helpful?


In recent years, largely as a result of incredible technological changes, the world has moved on at a pace that few would have thought possible ten years ago. It was only 15 years or so ago that email was regarded with suspicion, that websites were rare in the extreme and that social media was not even a twinkle in some ‘techies’ eye. As the use of technology has become more widespread customer practice and demand has changed dramatically.

Was it only a few years ago that people maintained that internet sales wouldn’t take off claiming that before purchasing buyers would need to be able to touch and feel whatever it was they were buying. Nowadays we can reflect, not only upon how wrong they were, but also upon the wider impact of the online revolution. One could write volumes on the subject; demands for greater convenience, lower prices, that most white goods are now regarded as being disposable to name only a few of the outcomes.

Simultaneously attitudes have changed in other areas. Remember the heady days when our houses earned more than we did and, for those who had any, cash deposited in the bank grew in value with little or no effort. Those were the days when, if servicing debt became difficult, we just borrowed more; happy days, when water was cheaper than milk and diesel was cheaper than petrol. Weren’t those the days too when the experts decided that it would be more cost effective to send manufacturing processes to parts of the world where they could be carried out more cheaply while we would thrive on ‘high value’ processes alone.. What crazy times they were.

My point? Well we can bemoan rises in public borrowing, widening of the balance of payments, reduced standards in education, the wrong type of leaves on the line, and any other thing that takes your fancy, but the fact is that, unless somebody is prepared to do something as a result, such indicators are of little more than academic interest. In any case, given the way the world has changed in recent years, I would question whether the traditional indicators are as pertinent as they were in the past. The one thing I am sure of is that the time for simply sitting with our heads in our hands has long passed we need action, energy and direction leading to growth in the economy. This government didn’t cause the current problems but as they are in the driving seat they need to get on and do something about it.

The 2012 Olympics has proved that we really are ‘Great’ Britain; what we need now is to act as though we really believe it

That we live in an age of innovation is surely beyond doubt but whether we have a sense of the importance of our nations contribution or whether we have successfully adapted to the changes that have resulted, is debatable. In the politically correct world in which we live it has become unfashionable to shout about our strengths but the truth is we have a history of leading the world and, contrary to the opinion of some, we still do play a leading role.


Those of us that are of a certain age will have been brought up to regard the Industrial Revolution, which spanned the eighteenth and nineteenth centuries, as the defining period in the development of our modern world economy and whilst people today will, rightly, point to the fact that their peers have taken the technologies of that age to higher, and previously unimaginable, new levels it was the great British engineers of the time such as Brunel, Faraday, Babbage and Stephenson, and the visionary entrepreneurs that supported them, who led the way. Others have learnt to develop their work but it is they who laid the foundations that underpin much of that which we take for granted today.

Future generations brought up on the achievements of the likes of Zuckerberg, Gates and Jobs will probably claim that it is their achievements which are of greater importance, conveniently overlooking the fact that without the invention of the British Tim Berners Lee their products would simply not have existed, .

Actually the debate as to who is the most important, whilst interesting, is arguably fairly pointless as it ignores the fact that a great many people and organisations, working in fields such as medicine, aeronautics, electronics, bio and life sciences across the globe, have made sensational contributions to our modern world. My point is that we often forget that we are a creative nation that has much to offer, a nation that should be enormously proud of its achievements. I strongly believe that if we were to spend more time focusing on the positive we would be more likely to be successful than if, as a nation, we continue to focus on our default position of leaning toward the negative.

Clearly we face challenges, the rest of the world does too, but there is evidence to suggest that we have struggled more than most to come to terms with the demands of such a rapidly changing world. Recognition of the issues is an important starting point. Gaining an understanding of the impact is essential and a good deal more productive than navel gazing. As soon as we have recognised, and fully understood all the implications, the sooner we will be better equipped to react to the resultant range of complex issues that need addressing.

One only needs to consider the future skills people will require to understand just how complex the issues are. Arguably the range of skills required to sustain the Industrial Revolution of the 18th and 19th centuries were, except at the highest level of management, limited and that essentially all that was required were large numbers of people capable of repeating a limited number of easily taught skills, as a consequence, the need to educate or develop a skilled workforce was not the important priority it is today; neither were numerous social considerations that we now regard to be our basic human right.

Nobody can imagine that for a well developed nation adapting to all this change will be straightforward. Indeed, the period following the Industrial Revolution was strewn with political mistakes that had an adverse social and economic impact on a vast number of people and they had none of the challenges presented by a modern democracy. With goodwill and a positive approach we will overcome these challenges.

The 2012 Olympics has proved conclusively that we really are ‘Great’ Britain; what we need now is to act as though we really believe it. We must set aside our faux modesty and our inclination as a nation to talk ourselves down and move forward in a positive fashion. We have much to be proud of, the self flagellation must stop, we need to begin acting as though we really do believe it. After all, we can’t blame the rest of world for not treating us seriously if we fail to do so ourselves.

Business people ask for little other than to be able to operate on ‘a level playing field’

Over the years I have noticed an increase in the impact of holidays, sporting events and other national celebrations on doing business in the UK. Come Easter it seems as though someone has fired a gun and then, as a nation, we metaphorically prepare to pack our buckets and spades. This year, though, we are experiencing the phenomena ‘with bells on’. An additional bank holiday, the Euros, the Olympics followed by the Paralympics added to the usual menu of Wimbledon, the ever growing number of cricket matches and so on.


What the impact of all this is depends very largely upon who you ask. The more optimistic will argue that all this activity encourages people to stay at home and spend their money here rather than on one of the Costas or some Greek Island. At the other extreme those with a somewhat curmudgeonly disposition might argue that all this jollity is more likely to result in hell and damnation raining down upon us all. If you work for Transport for London I guess it’s an opportunity to threaten strike action unless their employer’s handover payments additional to already agreed overtime rates.

For most employers the only choice is to manage the impact as best they can within the confines of the already penal legislation governing employment. No one seems to be too concerned as to how all this affects them and now, joy of joys, we find that they are also required to compensate staff struck down by disease or injury, whatever the cause, whilst they are on holiday. Goodness knows what those dear people in Brussels will think up next.

Actually I enjoy all these supporting occasions as much as the next man, and it was a delight to take part in the Diamond Jubilee celebrations, but I do strongly believe that we need to consider the impact of all this on small businesses in particular. Business people, and I don’t mean the greedy few that are regularly featured by the national press as being representative of the business community, ask for little other than to be able to operate on ‘a level playing field’.

Our competitors in other parts of the world look upon our employment laws with incredulity, the Americans simply do not comprehend how businesses on ‘this side of the pond’ can afford to allow such generous holiday entitlements. Nonetheless I am not arguing that entitlements be reduced, just that the employers obligation to compensate staff for being sick whilst on holiday be wiped from the legislation. It is, frankly, nonsense.

Hertfordshire has an enormous number of great businesses and community leaders who make a formidable team

On very rare occasions a plan comes together providing results which are way beyond one’s expectations, our ‘Inspiring Hertfordshire’ awards evening was just one such occasion. Not simply a ‘sold out’ event at a great venue, or a get together of friends and colleagues, it was so much more; it was to my mind an outstanding evening that will live in the memory for some time to come. Sure it was a great spectacle and everything you would want an event to be but, the real ‘icing on the cake, was that it was an evening spent amongst many truly inspirational business people and community leaders all of whom had contributed so much to the fabric of the county.


Naturally those who won awards were ecstatic but the atmosphere was really generated by the generosity of spirit of those other finalists who, despite their disappointment, joined in the celebration. It was they who embodied all that is good about living and working in Hertfordshire. Personally I wish we could have shortlisted all the entrants but sadly the venue was simply not big enough.

In praising all those who entered the awards I must not forget our wonderful sponsors. If a better group of people to work with exists I am yet to meet them. To put on an event of this nature and complexity and involving significant costs always causes concerns. Will we attract enough entrants? Will the entrants be of sufficient quality? Will it be a financial disaster?

As pointed out above the numbers and quality of the entrants was everything, and more, than we hoped. Awards are generally judged by the quality of the winners, for me the ‘Inspiring Hertfordshire’ awards should be judged on the quality of the entries that did not reach the shortlists. I imagine many of them will be wondering what they have to do to get the recognition they truly deserve.

As for concerns about the financial performance of the event they were soon dissipated by our remarkable sponsors and patrons. From day one they were on side supportive and helpful beyond words, my heartfelt thanks to them all. Porsche Hatfield who supplied the venue could not have been more accommodating and, as you might expect from such a marque, demonstrated professionalism of the highest order. Our headline sponsors, Exemplas and the University of Hertfordshire showed no hesitation in demonstrating their support which brought not only reputational benefits but also much reduced our other concerns.

Attracting a number of other high profile sponsors from the Hertfordshire business world: Johnson Matthey, Tesco, Kiss Communications, Simplyhealth, Veolia Water, Ashridge Business School, Breeze & Wyles Solicitors LLP, Pearldrop Video Productions, Guinea Fowl Creative, and Accounting Academy Partnership; not only enabled us to produce an event of outstanding quality but also contributed enormously towards attracting a high quality field. Of course the awards were not just about business they also sought to recognise some of the great work being done by social enterprises and community leaders.

My special thanks to County Councillor and Leader of Stevenage Borough Council, Sharon Taylor, whose sponsorship through her locality budget not only provided tangible support but also contributed to the overall aims of the ‘Inspiring Hertfordshire’ campaign and will I am sure provide encouragement to all those who selflessly support important causes in the county.

Before finishing it would be totally remiss of me if I were to forget the professional contribution of Pump House Productions, Richmond Caterers and, of course, the excellent Steve Folland from Jack FM. Their cooperative professionalism in working with the Chamber’s staff, especially Jill Coggins and Jodie Reid, was absolutely key to the success of the evening.

Should anyone think that I have written this simply to crow about a great success they would be wrong, my purpose is to demonstrate that despite the constant output from various doom merchants Hertfordshire has an enormous number of great businesses and community leaders whose combined parts make a formidable team. My thanks to all who were involved but particularly to all those who entered I hope we will see you all at ‘Inspiring Hertfordshire 2013’.

Oh, and to all those who still think I am crowing, OK I confess, but I truly am extremely proud to be associated with all those concerned.

There are times in history that call for great leadership. I would suggest that now is one of them

In challenging times when our focus should be on key issues it is depressing to see that nationally, our so called leaders, consider that reflecting upon who ate what, where and with whom carries greater importance than encouraging growth in our economy. There are times in history that call for great leadership I would suggest that now is one of them. We do not need a great debate on hot pies, queues at petrol stations and the usual party political tit for tat. It is time that national leaders of all parties started to ‘man up’ and begin doing what is best for the country.


That times are difficult is beyond dispute but thankfully, despite the seemingly endless shenanigans of the Westminster village, many businesses continue to display admirable levels of resilience and are ‘turning the corner’. It is a great shame that they are not receiving the support they need to fully capitalise on their efforts. I am not talking about handouts, I know there is very little public money available, what we need is a range of clear strategies focused on encouraging a competitive business environment. In any event spending vast sums of public money rarely has a long term effect, one has only to go back to Tony Blair’s ‘education, education, education’ response when asked about his main priorities. Businesses were complaining of difficulties in recruiting skilled staff then and, 15 years and billions of pounds later, it still has difficulty recruiting people with appropriate skills.

Leadership requires conviction and an ability to overcome difficult challenges. Arguably our lack of leadership is illustrated in our inability to overcome what might be described as the ‘too difficult’ strategy issues, take for the example of a lack of an aviation policy. I recognise that this is a controversial issue but, if we are to remain a major trading nation, we must be able, conveniently, to visit our trading partners in other parts of the world. We also need them to visit us. In the past forty years, while many of our competitors have moved forward with numerous major developments, we have built a couple of terminal buildings and increased landing fees making us one of the most expensive places on earth for business people to visit.

Whether it be resolving issues concerning skills, international travel, roads, railways, housing, high speed broadband or a plethora of other infrastructure issues it seems that we have become followers not leaders. We have become bickerers and point makers more interested in promoting narrow vested interests and proving points rather than achieving things. Perhaps, the recently introduced planning regulations will improve the situation, we shall see.

There are numerous other ‘too difficult issues’ many of which are exacerbated by the speed of change in our modern world, they nonetheless must be addressed if we are to maintain our position as a leading trading nation. To paraphrase Einstein it is a sign of insanity to keep doing things the same way expecting a different outcomes, had he been alive today he might well have warned about the dangers of pursuing similar strategies whilst the environment is changing around you.

What might be seen as political rough and tumble in Westminster amongst the national press has consequences elsewhere. I am frankly not concerned about the dietary whims of David Cameron, Ed Milliband and their dinner guests, I am even less interested in their ongoing games. We have overcome a number of challenges in recent years but there will inevitably be more to follow. We do not have time to mess about, we need to address important issues not waste time satisfying the self indulgent mores of the Westminster Village. It needs to change the way it does business, and fast.

We have applauded the first two ‘Osborne’ Budgets but on this occasion our verdict is ‘must do better’

As yet another Budget comes and goes I am keenly aware that the rhetoric surrounding it has changed little over the years. Those on the same political side as the Chancellor pick out the bits they like and herald the whole thing as though he had produced the elixir of life, those from the opposition pick out the bits they don’t like and accuse him of being something akin to the devil incarnate. Neither approach does them any credit nor does it do us mere mortals any particular service.


In my view this year’s budget was not too different from the majority I have listened to over the last twenty or thirty years, good in parts not so good in others, from my perspective it neither got the blood racing nor did it make it boil. Of course the reduction in Corporation tax is welcome as is the support for companies engaging in research and development but the failure to retract plans to increase fuel duty and business rates was disappointing. Despite claims to the contrary this was not a budget to inspire growth, it was neutral at best.

Whilst some Hertfordshire businesses are starting to see ‘light at the end of the tunnel’ times remain tough. These, previously announced increases will only hinder hard pressed business people in their efforts to grow profits and in so doing to provide the platform that will create much needed jobs. Arguably this government has done much to stabilise the economy following years of profligacy by its predecessor but much more needs to be done.

Whilst applauding the Chancellor for ‘steadying the ship’ one is, nonetheless, entitled to ask “what next”. Once stability has been achieved we have to plan for growth. As any experienced business person will tell you standing still is rarely an option. There is much to be done and I certainly recognise that the challenges are complex but, loading additional cost burden on thousands of small businesses is not the answer. Certainly the reduction in Corporation Tax will help some but it won’t make up for the additional property costs (including rent) or the burgeoning increases in fuel costs. Added to the additional National Insurance costs landed on business during the last throes of the previous government it requires, if anything, genuine reductions in the cost of doing business.

The British Chambers of Commerce recently launched its ‘Business is good for Britain’ campaign it might have used the word ‘essential’. Whichever way one cuts it when it comes to wealth and job creation business is ‘the only game in town’. Hertfordshire businesses in particular have demonstrated extremely high levels of resilience in the face of rising costs and increased global competition. Given a supportive environment Hertfordshire businesses will begin to take up the slack in the jobs market but they cannot do so if they are continually put under pressure by the effects of indirect taxation. We have applauded the first two ‘Osborne’ Budgets but on this occasion our verdict is ‘must do better’.

Hertfordshire is Inspiring!

One of the great things about living and working in Hertfordshire is that you don’t have to look too far to find examples of innovation that have impacted on the way we live today. People living and working here have been leading the way for years and, as a result of their efforts, an enormous number of ideas and inventions that influence our lives on a daily basis where created and developed here.


Imagine, if you will, not having access to mass produced paper, the modern film industry or a host of life saving drugs. No pun intended but where would we be without satellite navigation and its myriad of applications and, goodness knows, how we would survive in the modern world without mobile phone technology? The list of life changing developments emanating from Hertfordshire over the passage of time has been truly staggering and, no doubt, I will admonished for failing to highlight a host of other notable achievements that grew from the labours of people who chose this county as a base for growing their ideas.

Our record of innovation is not confined to the past, one of the great joys of my job is the fact that it enables me to visit businesses in all parts of the county that continue to keep us in the vanguard. I am constantly amazed at the ingenuity and originality that is demonstrated by Hertfordshire businesses whether in the production of innovative products or simply finding a new and better way of executing familiar processes.

The county’s achievements are not confined to high tech development either, it has been home to a legion of people who have simply been inspirational through their artistic, political and sporting endeavours; Gordon Craig was born here, Clement Atlee was educated here, and Sam Ryder introduced The Ryder Cup which was first competed for in St Albans. Today’s list of the sporting and artistic greats who have lived or been educated here is enormous; Ian Poulter, Lewis Hamilton; Jack Wilshere, Alan Ayckbourn, Michael Morpurgo, to name but a few.

Of course the real inspiration comes from the army of unnamed individuals, the great managers, engineers, hoteliers, inventors, salesman, designers, educators, strategists, caretakers, business people, employers and employees of all shapes and sizes. I am sure I have missed someone but I hope you understand what I mean. Regardless of what we see and read in the national press or hear from the legion of so-called experts about the trials and tribulations of the economy Hertfordshire is a great success story and it is very well placed to continue to be so in the future.

In short, at a time when we could all do with a little injection of inspiration, we can reasonably claim that we are surrounded by it. People in this county have been engaging in inspiring activities for hundreds of years. People in this county are still engaging in inspirational activities. At a time when we are subjected to so much negativity from people who are more conditioned to highlighting problems than being part of the solution it is about time we plugged into the positivity emanating from them.

In 2012 the Hertfordshire Chamber of Commerce & Industry will be promoting ‘Inspiring Hertfordshire’ a campaign to focus on what is positive in the county; we want to use it to inspire young and old; and, we want to use it to support businesses in the county in their efforts to lead us out of the current economic environment. We will highlight modern day business, educational and community achievements through an awards programme; we will continuously promote inspirational and innovative deeds and, working with like minded partners, we will continue our ongoing objective to play our part in making Hertfordshire a great place to do business.

Recent history has been littered with schemes...drowned in a sea of mediocrity

I doubt whether many employers will turn their noses up at the government’s contention that there is a need to improve workplace skills and I am certainly not going to join them even if they actually exist. Equally I will not be enrolling into that happy band of people who unquestioningly accept pronouncements, usually put forward by Ministers and their obedient servants, to the effect that qualification alone is the answer to our prayers. Indeed where it is due I intend to be as critical of this government as I was of their predecessors.

Whilst welcoming the government’s commitment to support an increase in skills within the UK workforce I have reservations as to whether the ‘new dawn’ brings with it any more realism than that which accompanied past efforts to do so. Without wishing to be seen to be too curmudgeonly it seems to me that recent history has been littered with schemes posing as the latest panacea which, ultimately, have been drowned in a sea of mediocrity.

Why, despite the enormous investment of public money in recent years, have so many schemes failed to produce little more than short term benefits rather than answer the challenges of a competitive global environment? Could it have been that providers were encouraged by a government obsessed with sound bytes to focus on delivering numbers rather than providing a quality product? Could it be that employers, seduced by the promise of fully funded training, failed to demand the higher standards required to ensure that the training on offer satisfied the needs of their business? Could it be that the whole exercise was about funding and bits of paper? Could it be that many of the schemes were simply designed to reduce the level of the political fallout attached to youth unemployment?

Harsh? Unfair? Maybe, but not entirely I think, but are politicians alone to blame? Not entirely we all have to take some of the rap. In truth many of the schemes were appropriate and well thought out, the fault lies within the execution with the result that many people have regarded some of the qualifications arising from them with a degree of disdain rather than take the trouble to understand how they might contribute to their business plans? How many had been content, simply because they were funded, to take them at face value rather than take the trouble to fully read the curriculum to understand what exactly was involved? The scheme was fully funded, the member of staff got a certificate and the provider got paid. Oh! And the politicians were able to boast about yet another contribution to the wellbeing of mankind.

How many of us have really taken the trouble to understand some of the qualifications on offer and the benefits they offer. I recently read the contents of an NVQ Level 3 in Business Administration and will no longer question its efficacy or usefulness. Properly assessed it is a challenging and comprehensive qualification. Whilst accepting that not all providers have engaged in shortcuts or, indeed, all employers have failed to be sufficiently demanding, too few have been as diligent as they might have been. The result? Despite the merits of various qualifications they have ultimately delivered a great deal less than should have been expected.

The solution? Government should introduce a time served system in which higher standards are sought thus reducing the opportunity for shortcuts to be taken. Employers should be more effectively engaged to ensure that training (particularly that which is funded by Government) actually fits the needs of their business. Finally, we all need to understand that training individuals is not simply a philanthropic exercise, unless we treat it as having real value it will regarded as having none.

It is all too easy to question the credibility of vocational qualifications but the truth is that they are important to the future development of our businesses and the people who work in them. Qualifications alone are not the answer, nonetheless, we all need to do more to ensure that they are challenging and appropriate. We all need to value and support the development of higher level skills, if we do they will be held in higher regard by those achieving them. They in turn will make a greater contribution to the businesses for which they work.

Long term solutions not blame

The recent riots in London and elsewhere have, rightly, attracted enormous condemnation of those concerned in the looting, arson, theft and other forms criminality. Whatever challenges, real or imagined, the participants face there can be no conceivable excuse for their actions and I for one hope that the courts treat those that come before them in an exemplary fashion. The indiscriminate and unprovoked attacks on people in their homes, and while working in their businesses, has been truly sickening.
Apart from having to witness a variety of atrocious occurrences I guess the next thing we will be forced to endure will be the in-fighting amongst politicians of all parties whose horizons do not go beyond the next election. It didn’t take long to start and, no doubt, the bickering will grow in intensity during the coming weeks and months. So and so didn’t come back from their holidays soon enough; the cuts and withdrawal of benefits/EMA/community support were bound to result in these poor disenfranchised souls feeling the need to steal the latest 55” TV/i-pad/i-pod or whatever else took their fancy. Before any attempt is made to find solutions the game will largely be about ensuring that no blame attaches to them and, wherever possible, as much mud as possible is slung at the other side. The truth is that these examples of appalling behaviour were not caused by politicians of any party the responsibility lies fairly and squarely upon the shoulders of those who took part.
Despite recognising that politicians are not directly to blame it is clear that they do have a role in developing strategies that will make it less likely that these riots recur. The job to be done is enormous and will not be concluded following the uncovering of some form of miraculous ‘silver bullet’ nor, in my view, will solutions be found in committing the police to attending yet more community meetings.
My Grandmother was fond of reminding me that ‘the devil makes work for idle hands’ so maybe the starting point should be to find these people work. The flaw in that idea, though, is that most seem to be unemployable, unable or unwilling to speak in understandable English and largely of the view that the world owes them a living. On the latter point the world owes them nothing they are not prepared to work for and it is most certainly not incumbent on employers to conform to their strange twisted view of life.
Are they lost causes? Some may be but hopefully most can be redeemed, although this won’t happen if we excuse their every misdemeanour. In the meantime we desperately need to be working on those who are likely to follow them to ensure that they develop respect for themselves and others.
In the short term we need the government to do all it can to support all the businesses affected to get back on their feet and their staff back into work, more profound solutions will take a great deal longer.

Shared Parental Leave Proposals Ignore Needs of Business

Commenting on today’s Government announcement concerning Shared Parental Leave David Frost, Director General of the British Chambers of Commerce, said,

"While Nick Clegg’s announcement may prove to be politically popular it fundamentally ignores the needs of business.

Last week, David Cameron claimed a pro-growth, pro-business, pro-jobs agenda, but now the Government expects small businesses to cope with yet more red tape".

David went on to say, "This is yet another example of rushed thinking. It suggests that the Government is out of touch with how to support business owners. This sort of red tape is like a sledgehammer hitting small businesses which should be sources of growth and jobs."

We agree with him, what do you think?

ECONOMY, ECONOMY, ECONOMY...

A great deal has been said about the current economic climate, probably too much, there seems to be an ongoing competition amongst experts and the press as to who can come up with the most dire forecast. One says things are bad another says it’s worse. This may serve to burnish certain egos but it does nothing for consumer confidence and certainly doesn’t do anything for the majority of businesses that have been well run. In Hertfordshire we are fortunate to have many companies large and small that have set the standard in terms of innovation; companies that have been developed using sound business practice; companies have been run responsibly. Whilst some will need to tread cautiously they remain viable and will continue to be source of wealth generation and employment.

In any period of challenge those that have the ability to demonstrate clear thinking will come to the fore, thrashing around for one solution after the other is not the answer. The problem is within the financial system not, by and large, within the run of the mill businesses that most of us know and understand. Of course they are affected but it is not a problem of their making left to their own devices with sensible levels of financial support they will continue to succeed.

What is needed is a period of reflection enabling the myriad of initiatives to work, the seemly endless drive to fill column inches or airtime must come to an end. In the same vein the apparent need by some to provide justification has to cease. We all have a good idea what went wrong and where the blame lies. It will be the innovative non-financial businesses that will get us out of the problems that face us we are calling on politicians, regulators and the financial press to clear their heads and ensure that an environment is created that will enable them to so.

Getting the message across...

My colleague David Frost at the British Chambers of Commerce has certainly stirred up a hornets nest with his description of the outcome of BCCs most recent quarterly survey. Frightening, awful were just a couple of the adjectives he used. Personally I am concerned about the seemingly endless queue of people lining up to tell us how bad things are but, nonetheless, can understand where he is coming from. Things are certainly not as we would wish them to be.

I would prefer it if we all drew breath and allowed time for some of the measures that have been put in place to work. The reality of course is that until the banks start doing business very little is likely to change but, at least, the announcement by Lord Mandelson that there will be further funding to support lending should help. Following fast on David’s words I am sure he will claim that the BCC were instrumental in speeding up this process and, in fairness, so would I. Indeed it is correct to say that the British Chambers have led the debate throughout and I wouldn’t mind a small wager that they will be the first to call the recovery too.

Balancing the requirements to encourage government action and the need to protect business interests is not always an easy trick but the BCC has generally trod the line with a high level of expertise.

Looking forward it seems to me that one of the key messages arising from the problems in the economy is to learn the lessons. The current economic conditions not only cause difficulties but also identify, and amplify, some of our existing shortcomings.

As we fall down the OECD skills tables one cannot help thinking that if we are to continue attracting high levels of inward investment we will have to raise the level, and relevance, of the skills we seek to give our workforce. Despite announcements of redundancies there are still vacancies but sadly many require skills that we are short of, skills to support the engineering, electronics and pharmaceutical industries to name but a few.

If we are looking for some good news it is that we have many innovative and creative businesses with growth potential, we simply need to find more effective means of supporting them.

Oh dear, yet more employment legislation! The Government that claims it wants to help business strikes again!

Let me begin by saying that in 2008 any business that is able to be and doesn’t have a flexible approach to its staff is missing a trick. Good employers, generally, have a more effective workforce and reduce costs by retaining them for longer. If being flexible helps an employee, and doesn’t have a deleterious impact on the business, surely it makes sense to be so. Good employers have long since recognised the benefits of being flexible and therefore there is no need to introduce legislation to make them be so. It leads to better performance and gives them edge over those who are not.

The problem with legislation is that it has a disproportionate impact on smaller businesses and takes away the ability to apply commonsense. It must also be said that it does not discriminate between good and bad employers. Good employers will follow it diligently but nevertheless occasionally end up facing the unfairness of Industrial Tribunals and, in any case, incur the additional costs of implementation. Frankly, bad employers will ignore it.

It seems to me that this government has got so wound up with political correctness and an apparent wish to interfere in all aspects of our day to day life it has failed to understand that reasonable people can rub along perfectly well without their constant intervention. Legislation may keep some people on the rails but at the end of the day most of us will be good (most of the time) and some people will be bad. We do not require the State to constantly tell us what is right and wrong and how to behave.

Since it came to power in 1997 this Government has stated that it wants to support business – at best it has been inconsistent. I am not sure that this legislation would be welcome at anytime but at a time when business people across the country are trying everything they know to sustain a future for their businesses the announcement of yet more legislation should be condemned. It really does appear that the only answer this government has to life’s challenges is yet more legislation.

To paraphrase Albert Einstein “Continuing to do the same thing and expecting a different outcome is a sign of madness”.

It’s a funny old world or is it?

Just when you think you’ve seen it all something else happens. A government with a Prime Minister who made his reputation pursuing Miss Prudence starts throwing money around like a lottery winner, the Governor of the Bank of England declares that nationalising the banks is an option and RBS/Nat West announce that they are going to start doing business again.

Let’s get the last point out of the way straight away. Well done RBS/Nat West, let’s hope that the others follow their example sooner rather than later. Unless and until all banks return to doing sensible business any hope of recovery is nothing more than a pipedream. I don’t mean returning to the target driven recent past where lending at any cost appears to have been the norm but a return to what many of us of a certain age would have regarded as “good business”. Sensible lending where all concerned understood the risks and where clients knew where they stood.

As for the Governors aside that nationalising the banks was “an option” something clearly needs to be done to get the them “out of neutral” but, as things stand at the moment, it would be difficult to say who would be worse, our under fire bankers or our government.

As for the measures announced this week by the Chancellor let me say that I, like everyone else in the country, really, really hope they work. Do I think they will? Well that’s another story. Actually I am far from convinced and certainly question some of the measures announced. Reducing VAT 2.5% might have some marginal impact but given the level of discounting one already sees on the High Street and elsewhere I really can’t see it having much effect.

What concerns me greatly is the thought that as the economy is recovering businesses will be hit again by increases in National Insurance. I know the so called “giveaways” need to be financed but raising NI thresholds is a measure which will ricochet around the system like a stray bullet. Adding costs to employing individuals will add to wage pressures and make businesses even more reluctant to take on new people.

Ultimately, of course, its always business that pays and I acknowledge some good things in the Chancellor’s statement. Reversing the decision to charge empty premises tax for which we have been campaigning for some time, is welcome and the increase in funding for the Small Firms Loan Guarantee Scheme (as long as the banks get behind it) will have some impact.

Overall though the statement brought out my curmudgeonly side (not usually far from the surface anyway) and I am inclined to view it in the same light as most budgets in recent memory. A mixture of “smoke and mirrors” and we’ll all pay for it in due course. If it does the trick though, along with everyone else I will be delighted.

Where there's muck there's...

The more observant will have noticed our recent event aimed at raising awareness of the environmental sector and to start a countywide debate on the issues. This week I was able to join an East of England Regional Assembly party visiting the Danish Region of Mid Jutland which is taking an extremely proactive approach toward seeking energy efficiency solutions.

Of the sites we visited one converting animal fat into bio-diesel and another turning all sorts of manure into bio-gas were the most interesting. They were both interesting for a number of reasons, not least because they were turning materials that would have otherwise would have been incinerated into valuable heat and power sources. Another interesting outcome was the fact they were adding value to what, at best, would previously have been regarded as nuisance materials.

In a short visit it would be foolish to think that one could discover the definitive answer to the debate on energy efficiency, indeed if anything, yet more questions were raised. How do you ensure that the supply of the relevant materials will be sustainable? Can you ensure that the cost of the raw material is kept at a reasonable level? Can you make the process commercial? And so on and so forth.

To support their research they had also set up an Agro-Science Research Park where they conducted a range of relevant research, hosted start-up research companies and also encouraged young people to develop their science and engineering skills.

Was I impressed? You bet. Envious? Oh yes.

Hertfordshire prides itself on its knowledge based industries and makes a variety of claims about innovation in the county but I have to say we could learn a great deal from the positive, energetic approach of our Danish colleagues. We also need to recognise that finding solutions to the environmental challenges we face will not only be good for the planet but will also provide enormous economic benefits going forward.

As I write I can hear the planners saying “we don’t want these nasty recycling plants” but, in reality, they were no more intrusive than other farm buildings we see in our countryside. What I found really impressive was that someone could take 50,000 tons of waste animal materials and turn it into 55 million litres of high grade bio diesel. Even more impressively any residual ash was used to make cement and bricks. Efficient or what?

Of course there are many questions to be answered. We need to find satisfactory long term answers. If we don’t someone else will.

Solving the conundrum will provide opportunities on a variety of levels. The Hertfordshire Chamber of Commerce & Industry intends to play a leading role in opening up the debate on this subject and I would be delighted to receive contributions towards it.