Solid economy needed to underpin everything
AS IT became increasingly evident that we were heading for a hung Parliament, you could almost hear the collective groan being let out by business people across the UK.
This wasn’t due to anyone’s personal politics, rather to the expectation of further uncertainty and instability.
Hopefully things will settle down soon and in the Queen’s Speech we should get a better idea about what the priorities of this Parliament will be and how they will expect to be achieved.
Whatever happens this coming week, this is a serious moment in British history and we need a solid economy to underpin everything.
From last year’s referendum to now, British businesses have been doing a sterling job of steadying the ship and last week’s ONS employment figures were very positive, showing that unemployment has remained at its lowest level since 1975.
However, despite record numbers of people in work, ONS also revealed that weekly wages aren’t increasing as quickly as inflation, and they have yet to recover to their pre-recession levels.
This is a very telling stat and could well reflect the fact that while businesses are doing okay, there is still so much uncertainty and nervousness.
This uncertainty for businesses has been identified by the recent IoD survey carried out straight after the election result, which revealed that there has been a drop in business confidence with only 20% of respondents optimistic about the economy.
The same survey listed the top three priorities for business as being a new trade agreement; education, skills and training; and modernising infrastructure. These three things are essential if we are to restore business confidence and they need to be prioritised urgently.
With so much political upheaval and uncertainty, there is also the prospect of major projects falling by the wayside, and one of the key schemes that is yet to come to fruition is the Swansea Bay lagoon.
The lagoon was awarded a development consent order in 2015 but the next steps are yet to take place despite the Government-commissioned Hendry Review describing the proposed scheme as a “no regrets option”.
The plans show that the lagoon would generate clean electricity for 155,000 homes for 120 years, creating 2,000 construction jobs.
With construction expected to take four years and the first power being generated within three, one can understand why the Hendry tidal Review appeared so positive about the project.
Any clean energy option that can also create a positive impact on jobs and the economy really should be taken into consideration, especially with the Government’s commitment to the 2008 Climate Change Act, which means the UK is committed to reducing greenhouse gas emissions by 80% by 2050.
Building the lagoon in Swansea would not just have a positive impact on the environment and the Swansea Bay area, it would be more than likely to have a knock-on effect across Wales with potential tidal lagoons all along the Welsh coast.
But with the Government still trying to reorganise itself and with Brexit negotiations now kicking off in earnest, the decision over the tidal lagoon, and potentially other important infrastructure projects, might be in danger of being delayed for the time being.
This wouldn’t just be disappointing for Wales, it is also representative of a wider issue, which is the fact that the economy has been in a relative state of paralysis since the snap election was initially called, and business people are anxiously waiting for some clarity and a roadmap from which they can plan and invest in their own businesses.
I hope that we won’t be waiting long.
Matt Southall is group managing director of multi-specialist recruiter Acorn