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The Financial Times has spoken to six individuals, with different backgrounds and wishlists, asking for their verdicts on the pre-election Budget. Residents and businesses based in Norwich tell us what impact George Osborne’s policies will have on them.
The digital entrepreneur: Focused on growth
Juliana Meyer, a 32-year-old digital entrepreneur, has little time for complaints that London drains skilled people from the rest of the UK.
An engineering graduate from Oxford, Ms Meyer ended up in Norwich by chance. She is now an enthusiast for the city — and the backing given by this government to entrepreneurs.
Operating from Norwich, means you can get the “best of London without paying London rates”, she says.
Ms Meyer’s start-up, SupaPass, provides technology for musicians to operate subscription-based fan clubs and the chance to access a new, regular income stream previously out of reach to all but the biggest artists who could afford bespoke technology.
Support she has received ranges from UK trade and investment funding, through regional development money, to participation in growth accelerator programmes — all of which have made a “real difference”, she says.
The UK’s creative industries have been an area of focus for the government in its drive to increase exports. It wants to double services exports from creative industries from an estimated £15.1bn (8 per cent of service exports) in 2011 to £31bn by 2020 and broaden the range of businesses targeting exports.
Following a trial launch, SupaPass completed a successful fundraising round and is set to launch publicly this summer.
A recent report from Tech City UK— a group that promotes the digital sector — put Norwich at number 15 on its list of the UK’s top 21 clusters ranked by digital employment. In particular, it cited the city’s supportive networks and the strong supply of skilled graduates from local universities.
Alongside continuing support for start-ups, Ms Myer is looking for politicians to improve infrastructure, notably by encouraging faster broadband, the “life blood for businesses like ours”.
Juliana Meyer said she was “really quite impressed” with the Budget overall, pointing in particular to Mr Osborne’s emphasis of “building an economy based on savings rather than debt”.
She particularly welcomed the commitment to try and boost internet speeds around the country — “one of the most important things to ensure companies can do what they do from anywhere within the country”, increased investment in the venture capital fund, as well as the proposals for the help-to-buy ISA. “It’s such an important thing to help people build their own lives,” she said.
Farmers: Keen interest from UK mustard growers
Colman’s English mustard celebrated its 200th anniversary last year: but only seven years earlier it was uncertain that mustard-seed farming would survive in the UK.
A disastrous 2007 harvest, caused by a combination of factors including weather and lack of investment in seeds resulting in dwindling yields, meant that growers considered abandoning the crop.
After a crisis meeting with Unilever — the consumer products group that bought the brand in 1995 — 11 growers formed the English Mustard Growers Co-operative with a central contract with the multinational, to try to put the crop on a more sustainable footing.
A £20,000 investment from Unilever allowed them to pay for seed specialists to identify why yields were falling. There are now 18 growers in the group and the future for the UK’s only commonly grown spice looks secure.
Greg Bliss, one of the co-op’s directors, whose family have grown mustard seed in the area for a 100 years, said the process had been long and hard but there was strong attachment to the Colman’s brand.
An EU grant that enabled them to buy equipment, such as a mobile high temperature dryer, was “absolutely integral” in the early stages.
They are now working with growers in Dijon, France in the quest to improve the quality of the seed, to increase yields and attract more farmers to the crop. They would like to increase the percentage of English-grown mustard in Colman’s.
While all of the white mustard used in the blend comes from the UK, some of the brown seed is imported from Canada.
Achieving protected status for the product is another aim.
Growing mustard seed is a labour of love, with all the farmers in the co-operative growing other crops as well to make ends meet.
Michael Sly, chairman of the mustard growers co-operative, says more government investment in science is crucial.
“If we’re going to produce more food in a smaller area, with population increases here and around the world, and while meeting all our environmental responsibilities, we need science to help,” he says.
But they also want government help with more immediate practical matters: extending the tax-averaging period to protect farmers from commodity price swings, widening the scope of capital allowances, rethinking immigration-related restrictions on seasonal agricultural workers and, of course, flood defences.
|Mr Sly said the move to allow farmers to average their income tax over five years to smooth out the impact of volatile commodity prices was a “really important step” that would help. Despite the lack of measures for businesses in particular, he said it was important to remember “where we could have been”, giving the chancellor credit for maintaining a stable economy.|
The research scientist: Focus on post-election spending review
The plant science and microbiology centre sits with a cluster of other research organisations a stone’s throw from East Anglia university. Altogether, about 12,000 people — 3,000 of them scientists — work at the Norwich Research Park, which includes the Institute of Food Research, the Genome Analysis Centre, and the Norfolk and Norwich University Hospital.
More than half of the centre’s funding comes from the UK government and Prof Sanders says “the big unknown is the Comprehensive Spending Review and how science will fare as a result”.
The centre’s government funding has been frozen since 2012 until 2017, and Prof Sanders says if this position is extended until 2022, “that will be very difficult to manage”.
While science spending has been flat since 2011, escaping the worst of government cuts, the UK still spends less on science than many of its peers.
The two major research areas for the centre are food security and human health. On food security, the centre does extensive work on two of the UK’s main crops, wheat and oil seed rape, and has also recently started a collaboration with a bioscience centre in Nairobi.
“It can take about 15 years to get a trait from the laboratory into a wheat field,” he says, adding “these are not short-term projects”.
Recent governments have been receptive to preserving science funding, Prof Sanders says, and that while there may be inter-party disputes about its merits “it doesn’t seem to be a party political issue somehow”.
Continued ringfencing of the science budget is top of his wishlist. “Good strategic science depends absolutely on fundamental science for its success.”
Prof Sanders said the announcement that research institutes will have new flexibility — including the right to reinvest commercial income — was “absolutely essential” and would help institutes keep up with the latest technology.
He was more cautious about plans to introduce income contingent loans for PhD students, saying at the moment top students receive funding, so self-funded research would need to be designed to insure its quality.
Union officer: Job losses loom large at large employer in the city
The business — now part of insurance conglomerate Aviva — still operates from its elegant Edwardian office building in the centre of the English city. Sponsor of Norwich City Football Club, it remains one of the city’s largest employers.
But with Aviva on the brink of a £5.6bn merger with Friends Life, the largest deal in the UK insurance sector for almost 15 years, there is worry. The merger is expected to be accompanied by 1,500 job losses across the two companies as Aviva seeks to save £225m a year.
Aviva has given no information about where job losses might fall and Unite, the union that represents about 4,000 people across both companies, has called on the company to “resist the temptation of using the takeover as an excuse to slash jobs and erode terms and conditions”.
Mark Walker, Unite regional officer in Norwich, says there is apprehension among workers who are “waiting and hoping”.
There is a good deal of variation in the employment market in Norwich and the surrounding county of Norfolk, Mr Walker says. While there are signs of economic improvement, with companies expanding and investing in training, on the other side “we’ve sadly seen a massive rise in zero hours and low-skilled, low-paid jobs”.
Mr Walker says zero hours contracts, which give no guarantee of work, are “very rare” among small and medium-sized companies, with use far more prevalent among big employers.
His experiences are backed up by the latest estimates from the Office for National Statistics, which found that half of big companies use such contracts.
In contrast to the skilled jobs in finance in the city centre, there is a large number of food-processing factories and agricultural businesses, which as well as being a big draw for migrant workers employ a large number of local people, often on low wages.
Mr Walker, who has spent the past 16 years as a union official, says that from the mid-2000s he has seen a cultural change, with employers showing more respect for workplace rights, but that this has reversed under the coalition government, which has “no empathy for working people”.
“They can call it red tape as much as they want: we call it employment rights,” he says.
|Mark Walker said he was cautious about the Budget measures, saying that “on the surface it looks like more of the same . . . gimmicks in the run up to an election.” Any support for creating new jobs was welcome, he said, but stressed what the country needs is “decent” jobs, not more zero-hour contract roles, adding that in terms of support for job seekers “we’ve heard these sort of promises before”.|
The student: Disillusionment fuels sense of ‘a lost generation’
Coalition politicians hoping to tap into a feelgood factor should give the campus at East Anglia university a wide berth.
Asked to sum up students’ mood about their economic prospects, Liam McCafferty an elected officer at the student union, is blunt: “It is pretty bleak.” He adds there is a “general sense of despair and the feeling we are a lost generation”.
While tuition fees rises remain a corrosive issue, more pervasive is a sense that those graduating today have far fewer opportunities than recent generations.
FT research supports the sense of unease. Average twentysomethings have slipped from a position of comparative affluence to well below par over the past 35 years.
While Norwich is a “great city” where traditionally, lots of students have been keen to stay after their studies, Mr McCafferty says that in recent years the “possibility of staying here has diminished”.
Students increasingly feel the need to move to London, he says. There, instead of competing for lucrative graduate jobs, many find themselves disillusioned and chasing unpaid internships, he adds.
Mr McCafferty strongly rejects the argument that concerns about the introduction of £9,000 fees were exaggerated set alongside evidence that university applications are continuing to rise.
Higher fees have had a “real and a psychological impact” on students, he says. “More and more [are] doing the subjects they think make them directly employable,” he says, raising the prospect that arts subjects will become dominated by wealthier students.
Students and young people make up a large proportion of the South Norwich seat, which the Liberal Democrats won from Labour on a wafer-thin majority in 2010. But while the chances they will repeat the victory in the general election look slim, it may not be easy for Labour to pick up the disaffected student vote.
There is a “degree of cynicism” Mr McCafferty says about Labour’s promise to lower the top rate of fees from £9,000 to £6,000 a year, with the sense among students that they have heard such promises before.
Liam McCafferty said that plans to offer loans to PhD students were a “step in the right direction”, but he questioned whether students would want to take on more debt on-top of what they already owe: “Can you solve the problem of access by increasing the amount of debt?,” he asked.
He was also cautious about plans to offer a government contribution to those saving for a deposit, nothing the plans “only benefit those that have the money to put in the first place”.
The crisp maker: Kettle brand builds head of steam
Upmarket crisp brands have proliferated in UK supermarkets, encompassing an impressive range of flavours and root vegetables. But for the company that started the trend in 1988, simplicity is still key.
The potatoes that Kettle Foods use come from within 50 miles of its Norwich factory. They arrive still covered in soil and are hand-fried in big oil baths by staff wielding an instrument that resembles a garden rake. Workers joke that it is possible to tell who was doing the frying by the colour of the potatoes.
Data from Nielsen, a research company, puts the brand well ahead of its upmarket peers on sales. The latest data put it at number five of the top 10 bagged snacks sold in the UK, behind much bigger names such as Walkers and Pringles.
But its focus on the more expensive end of the UK’s salty snacks market does not make it immune from the impact discount retailers such as Aldi and Lidl have had throughout the industry.
In general, expensive snacks are still selling well. The total market is up 4.1 per cent in the year in volume terms, according to data from Kantar Worldpanel, a market research company. Shoppers have less money but still indulge in small treats, the say.
But discount stores are forcing the big supermarkets to look carefully at what they stock, and Dominic Lowe, managing director of Kettle Foods, says the company is focused on making sure “the range really works”.
Bought for $615m in 2010 by US-listed Diamond Foods from its previous UK private equity owners, the company on the outskirts of Norwich employs about 400 staff. Aside from its own brand of crisps, it also produces products for supermarket chains Waitrose and Marks and Spencer and Pret A Manger.
In a crowded market, head chef Chris Barnard, who has been with the company since the start, says the flavours “have to be as the consumer expects them to be”.
Ingredients such as balsamic vinegar, for example, are converted into powder form before being sprayed on to the crisps, rather than using a chemical substitute.
High-quality ingredients notwithstanding, the company’s main focus is on the high-fat and high-salt end of the market, which is increasingly in health campaigners’ sights, and on customers’ minds.
Unsurprisingly, Mr Lowe worries about the prospect of legislation in this area, or the idea of a watershed for advertising. He argues that public education about food is the key to tackling poor diets, rather than state intervention.
The company is also making changes to its products, and in January introduced baked crisps. “Everyone in the food industry wants to be in the ‘better for you’ sector,” he says.
With an eye on boosting the company’s exports to Europe, the prospect of an in-out referendum on EU membership also weighs on his mind. “It would be a disaster for us to have any trade barriers,” Mr Lowe says
|Mentions of the food industry were notably absent from the Budget, in a speech that was generally light on business specific measures. The focus on infrastructure improvements was also largely confined to the Chancellor plan to boost the north as part of the “Northern Powerhouse” project|
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