IoD Week in Policy 5th–9th July

The pandemic has certainly left us with a sense of solidarity, of everyone doing the same thing at the same time, feeling the same emotions, experiencing the same ups and downs. But nothing can quite compare to Wednesday night’s momentous, history making victory. Poland’s Hubert Hurkacz knocked out Roger Federer in the Wimbledon Quarter Finals! I should also add that England beat Denmark to reach the final of the Euros, the first time England has reached a major tournament final since 1966! Fans flooded the streets draped in the St George’s Cross, chanting those three words, accompanied by the horns of cars and buses: it’s coming home! And just as everyone is becoming increasingly eager to leave the country as well…

With restrictions being lifted on 19th July, double vaccinated citizens will be able to rush off to the holiday destination of their choice, as long as it appears on the list of 146 amber countries. Good news for the tourism industry. Mediterranean resorts, get ready!

19th July is also stage 4 of the roadmap mark II. Unlike 21st June, this time round seems certain. With the phrase ‘getting pinged’ becoming increasingly frequent (another one to add to the coronavirus dictionary), and cases rising again especially among the young population, many people are asking why are we opening up? Boris’ answer was essentially it’s now or never. And since he’s shifted the responsibility on to all of us, it will become harder to blame the government if things do decide to go wrong. How sneaky.

Open for Business 

– On Monday, the Prime Minister announced plans for 19th July, the second attempt to end Coronavirus restrictions.

– After a very successful vaccine rollout, social distancing will be removed, there will be no maximum capacity at weddings, concerts, and sporting events, and nightclubs will be reopened.

– Since cases are rising among particularly the young generation, reopening clubs could potentially be risky. Having said that, tequila proved an effective deterrent from the virus when we made it into ‘hand sanitiser’, so clubs may be the safest place after all.

– From an IoD perspective, it should ultimately be up to the employer to work out arrangements for their own organisation. Since each business has their own unique identity and therefore different needs, shifting the responsibility to the business population will allow companies to tailor arrangements to exactly how they require them.

– However questions are arising over the nature of assuring a safe return to the office, and who is then liable should an outbreak occur. More government guidance on this would be helpful.

– There will be a final review on 12th July.

Labour is working from home 

– On Sunday, Shadow Chancellor Rachel Reeves issued a statement that claimed a Labour Government would “make, buy and sell more in Britain”.

– The IoD welcomes the idea that SMEs would achieve greater involvement in British industry under Labour’s proposal to reform public procurement law.

– We are also encouraged by the promise to enhance environmental criteria into the procurement drive in line with the UK’s target to reach Net Zero.

– However, while these are definite positives, they should be careful that protectionism wouldn’t threaten to stunt British businesses as they compete in the global arena.

Trust in corporate governance: have they rest-audit?

– The IoD has responded to the White Paper on  ‘restoring trust in audit and corporate governance’, and has a few requests of the government.

– Firstly, we want them to take time to assess the viability of managed shared audits before widely implementing them. We are particularly worried about the willingness and capacity of smaller challenger audit firms to take on major audits in partnership with the Big 4. This is a step into the unknown, and the concept needs to be properly tested before it is rolled out.

– Secondly, there should be a professional framework for directors to ensure they understand the complexities of the challenging role in these changing times.

– Finally, the government needs to ensure that the Audit, Reporting and Governance Authority (ARGA) does not lead to the creation of a prudential regulatory regime.

Double jab knocks out quarantine

– The government has announced that from 19th July, those who are doubly vaccinated will not have to quarantine upon return from an amber list country.

– This is a very positive step for the travel industry, which has suffered hugely throughout the pandemic.

– Now things are taking off again, travel industry bosses are calling for the amber list countries to be expanded, though according to GOV.UK, there are 146 countries on the amber list.

– But the catch is that there is always the risk that an amber list country could move to the red list, and not just because too many sun deprived British tourists got burned. This is somewhat reminiscent of August 2020, when hoards of Brits frantically rushed home mid cocktail on the beach to avoid having to quarantine.

– Under 18s also will not have to quarantine upon return. We’re not sure how this will fare with parents who are allowed to take their teenager with them but leave their 20 year old at home, or with parents who wanted a getaway from their children, but now have no excuse not to bring them along too.

NIL red-taped borders

– On Thursday, the government announced the next addition to the UK’s collection of free trade agreements: Norway, Iceland, and Liechtenstein.

– The government has promised this deal will boost critical sectors like digital, financial, and professional services, and slash tariffs on top-quality British exports.

– Important industries will benefit from this smoother border policy, such as fishing, whisky and wine, cheese, and pork and poultry. So far, we’re wondering whether it was the digital services that attracted the UK to this deal or something else…

– The agreement completely supports the UK’s ambitions as a climate leader, and preserves our right to regulate in order to reach our Net Zero target. The deal promotes trade and investment to grow the low carbon economy, and accounts for environmental issues such as forestry, biodiversity, and sustainable fishing.

– Our Director General Jon Geldart commented: “This free trade agreement delivers the reassurances business leaders require to trade with these European markets. The IoD has long championed the need for continuity and cooperation following Brexit. This deal will help to deliver that stability, as well as liberalise trade in areas like digital and services.”

– United Kingdom signs free trade deal with Norway, Iceland and Liechtenstein – GOV.UK (www.gov.uk)

Darling buds of May

– The economy grew by 0.8% in May, aided by the opening of pubs and restaurants, and a pent-up population ready to go out with their wallets.

– However, despite this growth, this figure is slimmer than economists expected: a 1.5% increase. While this was the fourth consecutive year of growth, the economy is still 3.1% smaller than pre-pandemic levels.

– Let’s just wait until the July figures come out, when a certain sporting event, which has encouraged a bout of spending particularly in pubs, may contribute to another round of growth.

The week ahead in policy

A big day for sports fans this Sunday, with the men’s Wimbledon final and England v Italy in the final of the Euros. We may see a few grey faces on Monday morning in offices/Microsoft Teams throughout England. However, hopefully the news about the reopening of the economy will be enough to reignite some energy into the population.

In January, the bleakest month of the pandemic for many people, it would have been hard to think that the end of it all would finally be just around the corner. But that doesn’t mean there still aren’t questions. The inconsistency of public feeling towards the reopening will surely lead to a lot of mixed messaging, which we really hope the government will clear up over the course of next week.

Statistics:

Tuesday 13th July

– Insolvency Service Enforcement Outcomes monthly data tables

Wednesday 14th July

– Consumer price inflation stats for June

Thursday 15th July

– Labour Market stats for July will provide estimates of employment, unemployment, inactivity, average weekly earnings, vacancies and other labour market related statistics for the UK.

Friday 16th July

– Monthly Insolvency Statistics for June

Parliamentary Activity

Monday 12th July

– European Scrutiny Committee oral evidence on the institutional framework of the UK/EU Trade and Cooperation agreement.

– Treasury Committee oral evidence on jobs, growth, and productivity after coronavirus.

Tuesday 13th July

– APPG on Financial Markets and Services will discuss the future of financial services in the post-COVID-19, post-Brexit world.