Below please find key take-outs from our March 11th panel with the Rt Hon Anneliese Dodds MP, the Shadow Chancellor of the Exchequer; Stephanie Flanders, Head of Bloomberg Economics; Deborah Mattionson, founder of the polling business, BritianThinks; and chaired by Principal of Teneo’s Situations and Politics practice and former Downing Street Director of Politics and Communications, Craig Oliver.
- The outlook for the UK economy is positive in the short-term but uncertain in the long-term. Metrics measuring economic activity in the UK demonstrates that it remains around 50% of pre-pandemic levels. This compares to levels of around 70-80% in countries such as Spain and Japan, who have largely avoided a third lockdown. Despite this, the UK’s highly successful vaccination rollout gives cause for optimism in the short term. Once restrictions are eased, our panel were confident that there would be a burst of consumer spending – with people taking advantage of having built up a collective total of £120bn in extra savings over the last year. However, the impact of Brexit and the lack of long-term post-pandemic spending, will mean that the country has a deep hole to climb out from, in the long term.
- The issues caused by Brexit are no longer ‘teething issues’. Since January 1st, the structural aspects of the Brexit deal and our new relationship with Europe have been exposed. Our panel suggested that many of the issues reported by SMEs, and other businesses in the UK, are fixable with appropriate engagement from Government. Labour’s representative on the panel made it clear that the Government needs to step up and address the issues being raised by businesses up and down the country. Looking at public sentiment towards Brexit today, people’s views appear to remain firmly entrenched and as divided as ever. The only thing people have in common across the Remain / Leave divide is that they want the issue of Brexit to stop.
- More generally, the feeling among the public is volatile. Polling over the last year has seen Labour overtake the Tories, and vice versa. Overall, there is strong support for Rishi Sunak’s Budget, however the decision to limit nursing pay increases to 1% has led to a considerable backlash among the public. So much so, that 53% of the public would back nurses striking for more pay. Unless the Government performs a U-turn on this issue (which many expect in some form), it is likely to have an impact on vote share and support for the Government longer-term.
- Our panel expressed concern at the the Government’s decision to scrap its Industrial Strategy. They noted the huge amount of time and resources that had gone into developing the it to date and questioned why the decision was taken given the Government has indicated that it wants to carve out a clear, industrial future for the country. Reform and changes to capital markets, such as the outcome of the Hill Review, were cited. However, our Anneliese Dodds believes these changes should remain time-limited and that shareholder activism and transparency in the country’s capital markets have the potential to be a force for good within corporate governance.