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Coronavirus: UK/EMEA Weekly Update – Call Briefing and Recording from 4.29.20

April 29, 2020

Below please find key take-outs from our April 29th senior panel with Nicola Mendelsohn, Facebook Vice-President for EMEA; Frances O’Grady, General Secretary of the Trades Union Congress; Alex Baldock, CEO of Dixons Carphone; and Amber Rudd, Teneo Senior Adviser and former Home Secretary  -  chaired by Principal of Teneo’s Situations and Politics practice and former Downing Street Director of Politics and Communications, Craig Oliver.

 

Listen to the Call

 

The Political and Social Outlook in the UK

Politics

  • Cabinet was hugely relieved that the Prime Minister returned to work, as critical decisions are coming in the next few weeks.
  • The one area Cabinet will be keeping a close eye on its what happens in other countries as lockdown recedes – and the media will rightly be holding Cabinet to account on how the UK response compares to other countries, particularly European neighbours.
  • There is the potential for pre-existing inequalities to be embedded further in society by the crisis. This is, however, a chance for the government to embed the changes that Johnson spoke about during and after the election: tackling inequalities, levelling-up, and the green agenda.
  • The traditional Conservative role of limiting spending to protect future generations from debt is out of the window.
  • In some parts of government there has been a very different sort of relationship with the trade union movement. The Chancellor has worked closely with unions to get the job retention scheme up and running - the first time Britain has ever had a wage subsidy scheme - which not only puts money into workers’ pockets, but also means that when we do recover we will be able to bounce back quicker because workers will still be connected to those companies.
  • The government itself has changed. It can now reset itself, ditching its manifesto and the traditional idea of limited spending. This is a big opportunity for a big spend.

 

Employees

  • We are now seeing a change, not just in behaviours, but in the formation of two new classes: those who can work from home, and those who can’t.
  • We are seeing a fundamental shift in values, as many more people have been exposed to what the world is like and what is happening to our social protection system, realising:
    • Some of the most important jobs in society are paid the least.
    • Statutory sick pay is just £95 a week, and there are millions who don’t even earn enough to qualify for that, particularly in the gig economy.
    • Applying for Universal Credit is like a full-time job in itself.
  • Going forward, we have realised it can no longer be a case of us just looking after our families – we must look after our workmates and neighbours too.
  • The pitting of human health versus economic health takes us on the road to nowhere: we need both. While we can get back to work in some instances, it needs to be safe work.

 

Looking Ahead

Exit strategy planning

  • Johnson will inevitably be cautious after his experience, but he referred to a phased end to lockdown in his speech. Perhaps most interestingly, he said he would engage with businesses and the public on this – which is what the country is crying out for.
  • The end of lockdown must begin – the public is already going out more, councils are re-opening tips. The government must go with the grain, but businesses also need to adapt to implement social distancing measures in workplaces to give people the confidence to return to work.
  • Nobody can be sure that the virus is going to disappear overnight or not come back so we're still going to have to concentrate on issues like testing and tracing including at work.
  • A National Council for recovery will be important to support this: An opportunity to get different voices around the table, and different types of leadership to address the big issues around this crisis – like how do we ensure that we level up carbon, create good work, and plan for the future?

 

Returning to work

  • Millions of people have been at work throughout this crisis, but there is strong anxiety around what they might be bringing home to vulnerable relatives. It is important to build people’s confidence that the risk is being taken seriously in the workplace.
  • It will be important for every workplace to have a robust risk assessment in place, put in place now by enforcement agencies and supported clearly by government.
  • If people can continue to work from home, then this will need to be transitioned in a phased way. We are going to have to see a shift to the job retention scheme so that we can allow for short time working.

 

Economy

  • The choices going forward are more subtle than health vs wealth.
  • The Government is very mindful that people need to get back to work – the longer furloughing continues post-June, the more costs will skyrocket.
  • Recent gilt auctions of UK government debt have been oversubscribed by a factor of two. That will not be sustainable if furloughing continues.
  • Furloughing is costing more than initially expected. Currently, there are discussions over not winding the scheme down all at once but approaching it sector-by-sector.  From the end of June, we can expect to see furloughing being unwound sector-by-sector.
  • We need to be planning now for a tapering of the scheme, so we are not just pulling the plug – planning how the scheme will be gradually wound down while still supporting jobs and livelihoods.
  • We will also need to look at sectoral packages. Without a sectoral response, there are grave concerns about what kind of economy we’re going to emerge into. However, those support packages must be joined by a degree of conditionality if the public is going to give its support to industries like aviation. For example, tough commitments on how to green that industry.
  • A test of whether we are going to see a different approach after coronavirus is whether unions alongside business are invited in to sit around the table with government, to start planning for quality jobs and skills programmes that will do right by the new generation of workers.
  • Trade agreements seem to have stalled, and that needs to be a fundamental priority for the Prime Minister if we are going to get the country back on its feet.

 

Climate change

  • Greening any post-lockdown fiscal stimulus would be a positive outcome.
  • The Opposition will be eager to hold the government to account on net-zero targets. There will be some fiscal stimulus to get the economy moving and government should be looking for how this can be a green stimulus, to achieve two goals: rebuilding the economy and moving towards net zero.

 

Society

  • The hope is that we will learn lessons from this crisis. For instance, why not make our assumption going forward that people can work flexibly rather than it being a special request?
  • Meaningful work - if we look at the way post office workers and firefighters have volunteered to take on a community role in their jobs, we can see that people want to feel like they’re doing a valuable job that is helping their communities.
  • Perhaps we will also learn some lessons on the price that has been paid for the false economy of cutting public services and welfare systems.

 

Global outlook

  • It is right for there to be concerns about a rise in nationalism as a result of the crisis - we already saw signs of this in the arguments over the exporting of PPE equipment. The increase in scrutiny of China will contribute to this.
  • The biggest foreign policy issue pre-crisis was US-China relations – this has put a heater under that relationship, and it is dangerous.
  • When we look back at the financial crash in 2008, while the response of leaders like Gordon Brown was not perfect, there was a clear and coherent global response to the crash and a real sense of global leadership on display.  This time, there is a perception that global leadership has been woeful. It is profoundly dangerous to retreat into a kind of national nostalgia at the very time when we need international cooperation, including on things like PPE and ventilators.

 

The View From Business

Enhancing digital presence and remote working

  • Customers and businesses are adapting. Specifically for Dixons Carphone:
    • Businesses with retail space have had to learn a lot and adapt quickly to become an online pure play, including generating demand via social and digital marketing, using PPC. This has been a “forced digital first experiment” forcing the business to be leaner, more agile and to support more remote working after this.
    • The business has also had to learn how to respond to peak levels of demand without the usual preparedness in place and how to manage supply in these circumstances
    • And there have also been innovative approaches to managing the situation, coming up with new products and approaches that blur the boundaries between analogue and digital for customers.
    • On the customer side, there is continued customer demand in the business helping them stay connected/productive/entertained, and more people have become au fait with working online and communicating remotely.
  • The only way the business has been able to respond to customer demand to play a bigger role in their lives is by persuading colleagues that need to leave the home to work that they can keep them safe.

 

Emerging From the Lockdown

  • Business has a key role to play in enabling the government to be able to relax the lockdown
    • It will be incumbent on businesses to allow employees to work in a way that ensures more flexibility to limit too many people travelling at the same time, and to continue to work from home where it remains possible.
    • They will have to adjust to the reality of taking into account social distancing in the months ahead, to assure customers and employees that they are safe to visit premises/return to work
    • It is vital that businesses and other organisations (e.g. social care) are able to build confidence that employees’ safety is being taken seriously as they return to work
    • There will also be a critical dependence on what happens in the transport system and schools, which will impact the ability of staff to return to work in many instances
    • Global businesses will also be able to learn from experiences in other markets
  • Whilst the government acted decisively and well in supporting retail in what would otherwise have been a disaster, they now need to ensure that the furlough does not end at a ‘cliff edge’ at the end of June, and instead there is some ability to taper off benefits to allow businesses to adjust.

 

Looking Beyond the Crisis

  • Businesses will have to consider how they adapt to a new world:
    • Many older customers who previously did not use much technology may continue to do so more
    • Those with significant analogue parts of the business will have to ask themselves hard questions about the business model going forward, and how they will ensure they remain relevant following an increased ‘digital first’ mindset
    • Businesses may adopt much leaner, agile, faster ways of working, with an increased tolerance towards flexible and remote working, and potentially a more sceptical attitude towards travel bills
    • Businesses will also need to plan for how to respond to a likely recession and the impact on discretionary income

 

Social Media’s Role in Responding to the Crisis
  • Facebook has taken a number of steps to respond to the Covid-19 crisis:
    • Ensuring people have access to accurate information: This includes working with partners like the WHO to ensure useful information is at the top of news feeds, and prioritising getting misinformation off the platform – with a particularly focus on anything that could cause physical harm, taking advice from WHO and fact checkers around the world.
    • Supporting health reporting: Developing a symptom survey in association with Carnegie-Mellon to allow users to declare early Covid symptoms and help predict patterns of behaviour and hotspots to help governments
    • Helping people stay connected: Ensuring that people can connect via all platforms, including groups set up on Facebook and Whatsapp in local areas to link communities
    • Economic support: With a particular focus on small businesses, supported by a $100m grant for 30k small businesses around the world, and changing resources to help small businesses shift to digital and understand how to reach customers
  • Internally, the approach has been to start with a focus on Facebook’s people, ensuring that all employees had the full understanding of how to work remotely, enabling forums for them to connect via technology, and ensuring new skills are cemented

As the Covid-19 crisis continues, we will continue to support business across all sectors to navigate this period of uncertainty. This senior briefing series will continue into the coming weeks, and we welcome comments and suggestions from you as to the topics and the speakers that you would find it most helpful to hear from. In the meantime, we wish all the best to you, your colleagues and your families.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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