Below please find key take-outs from our January 22nd panel with Zanny Minton Beddoes, Editor-in-Chief of The Economist; Tony Danker, Director General of the CBI; Lord William Hague, former Foreign Secretary; and chaired by Principal of Teneo’s Situations and Politics practice and former Downing Street Director of Politics and Communications, Craig Oliver.
- Material easing of restrictions are still a few months away, however there is clear reason for optimism. Our panellists agreed that the combination of “Joe and the Jab” will have a significant impact across the world in 2021. The Biden Administration has already started bringing back a sense of normality and having an impact, evidenced through a raft of executive orders. Meanwhile, the rollout of the vaccine means the end is in sight. Our panellists were optimistic about a robust recovery, likely a K-shaped recovery, with some big winners and big losers. Nonetheless, pent up demand and high saving rates suggest that when economies are allowed to re-open, there will be a burst of consumer spending, especially in the UK.
- As we emerge from the pandemic, it will become clear how much Covid-19 has exacerbated inequality. We need to be prepared for major readjustments in our economy, society and way of living. As the role of government, cities and economies change, only businesses and countries that adapt to these transformations effectively will succeed. The Government talks about the importance of ‘levelling up’, however this is often limited to infrastructure. Our panellists suggested that the Government should focus on real wage growth and finding ways to make regions within the UK internationally competitive, similar to federalised countries. Meanwhile, healthy devolution and greater power to local areas were cited as a vital antidote to the overbearing levels of centralisation in the UK.
- Business are working to a different timeline to the UK Government on Covid-19. The view from business is that Q1 2021 will be dominated by a ‘hangover’ from Covid-19. Whilst the PM and other ministers have suggested that a slow return to normality can be expected for Easter, many businesses are still currently grappling with major challenges such as workplace testing. These complexities mean that many businesses don’t expect most of their workforce to be vaccinated until the second half of the year and that they won’t start to see a return to ‘normality’ until after summer 2021.
- COP 26 provides an enormous opportunity for the UK and business to work together to create lasting change – if we do it right. Our panel agreed that the delay of COP 26 to 2021 was an unexpectedly positive outcome and has actually increased the chances of it being a real success. Among businesses, there is a clear “race to the top” and appetite to play a material and visible role in COP 26. Despite this, many people, in business and government, still don’t quite understand the implications of achieving a target of Net Zero. COP 26 will act as an important catalyst, however, in order for it to succeed, it needs to be led from the very top of Government. There is a grave danger that No10’s in-tray – Covid-19 recovery and Brexit – may push it down the list of priorities.
- It is too early to know what impact Brexit is having on business. Whilst some industries have clearly seen “teething” issues with the new arrangement, others are beginning to experience the unforeseen legal issues and commercial reality of the trade deal. The major issue for business is currently around rules of origin and the implications for services. Nonetheless, some UK businesses are already losing custom due to the cumulative effects of transaction costs and the ability for consumer to go elsewhere. Only time will tell the scale of the impact the current arrangements will have on business.