IoD Week in Policy 11th–15th October

In keeping with the past month, this week has brought us continued shortages, the never-ending onslaught of Northern Ireland drama that’s giving Squid Game a run for its money, and our usual economic data telling us how much of a state our economy is in. These are testing times.

Speaking of which, it comes as no shock that something else has gone wrong in the dizzying world of coronavirus: a lab in Wolverhampton has provided around 43,000 false negative PCR tests. That’s positive. Or, not positive. It’s very difficult to wrap your head around.

Well done stakeholder reception

• Kicking the week off, proudly hosted at chez IoD, the BEIS annual Stakeholder Reception.
• This was a great event, at which Secretary of State Kwasi Kwarteng joined BEIS ministers, IoD members, plus our very own Director General Jon Geldart and Policy Director Roger Barker for an evening of festivities.
• It was a pleasure to entertain Mr Kwarteng, particularly considering he has had rather a lot on his plate at the moment what with the energy crisis and all. Sometimes all you need is a good evening out at 116 Pall Mall. Rumour has it he couldn’t wait to sneak down to the champagne bar once all the stakeholder engaging was over and done with.
• But in his speech, he emphasised how much he ‘loved business’, which is lucky given he is the business secretary. Here at the IoD we are hoping that this successful event signals renewed and long lasting commitment between the government and the business community.

Lord Frosty the no man 

• He certainly isn’t a jolly happy soul at the moment.
• Quite unlike our friend Mr Kwarteng, Lord Frost is snowed under. Things have started to get a little off-piste.
• On Wednesday, the EU agreed to remove practically all checks on goods travelling between Northern Ireland and the UK.
• This is a huge step from Europe considering how important their rules on standards are to them. Experts have been saying that they have really gone the extra mile. This should be good news, right?
• But oh no, the one sticking point for both parties is the issue of the European Court of Justice (ECJ) as the oversight mechanism for the operation of the protocol.
• Our government is arguing that the ECJ completely undermines UK sovereignty. Instead the government is calling for an independent body to replace the ECJ, in line with international arbitration standards.
• But, since Northern Ireland has unfettered access to the EU via the republic of Ireland the EU is refusing to budge on this, because the ECJ ensures equality of standards, a level playing field, that is fundamental to the single market.
• Goodness!

Job not quite done

• Unemployment has continued to fall. Staff shortages are continuing to rise… hmmm.
• Our Chief Economist/logician Kitty Ussher has referred to this as the vacancy paradox.
• The solution, she says, is that those who are still unemployed, and looking to fill those vacant positions do not have the required skills or training, and this is where government should invest its energy.

Summertime, and the livin’ is easy

• GDP rose by 0.4% in August this year, now down to 0.8% below our pre-pandemic average.
• Kitty accredits this to the easing of restrictions and the boom in staycations. So thank you to Cornwall and the Lake District for hosting us all, you really took one for the team.
• However, with our data showing that directors’ confidence has taken a sharp turn for the worst, figures moving into the Autumn may not look quite as rose-tinted.

Supplies supplies, another Christmas ruined 

• The chains have been broken. But we are certainly not free.
• The supply chain crisis has caused absolute mayhem across the entire globe.
• Increased demand + coronavirus disruption + shortage of port workers + shortage of truck drivers = disrupted shipping operations, shipping costs surging, and a global backlog of 584 container ships stuck outside ports. That about sums it up.
• To exacerbate what is literally the perfect storm, ports in Southern China were closed for two days this week because of a typhoon.
• In my book October is two and a half months too early to be even uttering the word ‘Christmas’, let alone worrying about what is going to be on the table on the day. But alas, fears have been circulating that this holiday will be even more ruined than last year. The ghost of Christmas present is upon us, and hopefully this will mean fewer carol singers haunting our doors.
• Staff shortages in abattoirs could see us having to split the pigs in blankets 5 ways. The plus side is that labour shortages hitting the poultry industry will mean there will be less complaining about how dry the turkey is this year. I did hear it doesn’t rain that much in Istanbul.
• For those who do not celebrate Christmas, you might be free from the utter torture that there may not be a tree in the corner this year, but this supply chain chaos is continuing to keep shelves empty, and throw many industries into turmoil.
• It is expected that moving forwards when things finally begin to ease, there will be bumps in the road in the form of bottle necks, and these will straighten out slowly before things can normalise again.

Regulation, Regulation, Regulation!

• This week Roger published his response to the BEIS consultation, ‘Reforming the Framework for Better Regulation’.
• The data showed that 4 in 10 business leaders believe regulation has a negative impact on their organisation.
• Our response is that the government needs to a better job of shaping a more business-friendly regulatory framework.

Week ahead in Policy

Next week, Parliament comes out of recess, and we are immediately putting them to work. Our Jon Geldart will be meeting with Chancellor Rishi Sunak for a pre-budget discussion. They will be talking about reducing tax, spurring investment, business rates, levelling up, and what opportunities there are in the green space. Hopefully they will also be chatting about when he can give us half-price dinner again.

At the start of the week, we will be engaging with our policy ambassadors representing all branches of the UK. We are hoping to have a really interesting and helpful discussion about policy issues that impact the different regions, and what more can be done to support members.

On Tuesday Kitty will be speaking at an IoD seminar with the Japan Association of Corporate Executives (Keizai Doyukai) on global supply chains.

Statistics:

Monday 18th October 

• Trade and investment factsheets – up to date data on the UK’s trade and investment position with overseas trading partners.

Wednesday 20th October 

• Inflation data

Parliamentary Activity:

Monday 18th October 

• APPG on Fair Business Banking will discuss how banks can support SMEs in the transition to Net Zero.

Tuesday 19th October 

• BEIS Strategy Committee oral evidence on how supply chain delays are impacting businesses and communities.
• The Global Investment Summit will be hosted by Boris Johnson, which seeks to encourage foreign investment by showcasing the best of British innovation.