Charting a new course
DESPITE COVID AND BREXIT CHALLENGES, BRITAIN CAN SET AMBITIOUS GOALS
FOR all the promise that 2021 holds, those hoping for immediate respite from the pain of the past 12 months will have a bit longer to wait.
With significant increases in transmission, and particularly a new variant of the virus emerging, the UK government’s recent announcement of tougher restrictions was as predictable as it was essential.
While businesses recognise the unenviable position the government finds itself in, it’s undoubtedly a bitter pill to swallow as they continue to do everything in their power just to stay afloat.
In the immediate term, we must put the health of our citizens first. That is beyond dispute. While businesses will continue to step up in the national interest to support the NHS, employees and customers in the weeks ahead, maintaining steadfast support for firms during this painful period will help ensure the recovery is delayed for as short a time as possible – as well as protecting vital jobs and firms that still teeter on the brink.
That’s why it was encouraging to see the chancellor move swiftly once again to provide additional support. With demand evaporating at breakneck speed, news of more, direct grants will provide some relief to eligible companies’ cashflow, especially in some of the hardest-hit sectors.
Yet, with the effects of a third lockdown impacting firms across the economy, there are other steps that can be taken to help bridge the all-important economic recovery phase.
Two things spring immediately to mind. Extending the job retention scheme to end of the second quarter would provide firms with a clear line of sight, assisting planning and investment. And removing the business rate relief cliff-edge in March would create much-needed breathing space, particularly if combined with re-examining the case for VAT deferrals.
Aside from tackling the pandemic, 2021 presents an opportunity to take stock of our approach to the economy and create a new British model of competitiveness outside the European Union.
The Brexit process was long and at times bruising. In some specific ways – including for the 80 per cent of our economy represented by services – it remains far from over. But that doesn’t mean we should show any less ambition. Our newfound status means that we must also be wary of diverging for the sake of it, and instead opt for the sustainable and inclusive growth the country needs. We must think bigger by taking a long view of how the UK can thrive in the global economy and work backwards from there.
We must also do better to address key challenges. Inequality remains a blight that must be solved, and one which has deepened in 2020. That means delivering a levelling up agenda that goes far beyond transport infrastructure, and truly international competitiveness strategies for our regions and nations. It means dynamic business sectors in each and every region. With many of our innovation success stories concentrated in London and the southeast, the need to share prosperity across all parts of the country has never been more important.
But it’s not just where people live that matters. We need to start delivering results on diversity too. Beyond the compelling moral imperative to deliver real, lasting and immediate change, there is also a robust commercial case for taking action. British companies can realise the huge economic potential of both diverse customer bases and talent pools.
Winners on this agenda will take all the prizes and Britain can be a role model here too, and that’s why I am wholly committed to the Change the Race Ratio campaign we launched last year.
Whatever happens in 2021, we can be sure that a new Britain will emerge. One that is outward looking, ambitious and set to compete to compete for the next decade. The same key traits of clear-headedness, pragmatism and fairness that have held British business in such high esteem for generations are needed now as we enter a new era for the country.
Yes, we must continue to brace in the coming weeks and months ahead, but the overwhelming sense of relief that will greet us when we finally beat the virus will be worth waiting for. And those efforts are already well underway, thanks to a rigorous vaccine approvals process that has shown what can be achieved when academia, business and government work together.
While the new year may not have started with the good news we all hoped for, let me say this clearly. The end is in sight. The vaccine rollout is now underway, mass rapid testing is increasing, and a brighter future is within our reach.
With the UK set to host the important G7, B7 and COP26 summits this year, we have a unique opportunity to demonstrate our resolve, our leadership and our competitiveness to a waiting world.
How we stood together, found common purpose and looked out for one another during the pandemic will stand us in good stead as we embrace the challenges and opportunities that lie ahead.