If the security market – and others linked to building, construction and technology – is to prosper post-pandemic, it will need a boost from the wider economy. What is happening out there in the wilds?
The Chancellor’s mini budget this week contained a number of measures designed to get the UK back up and running and provide support to sectors such as hospitality and retail which, as I have written before, have been hit particularly hard over recent months.
At Reliance High-Tech, we were particularly interested in the measures being introduced to support youth employment, including a £2bn Kickstart scheme for those aged 16 to 24 and cash payments to support the hiring of apprentices under 25. As a company that has increased its investment in apprenticeships over recent years, we greatly value both in-house career development and investment in our young rising stars.
Of course, it’s all well and good offering up financial support for business, but one of the largest problems that businesses currently face is general consumer confidence. This applies equally to the reticence of consumers returning to the high streets, as well as the slow return to offices, construction sites and the like. A study from the ONS this week revealed that 60% of people would be uncomfortable or very uncomfortable eating indoors during the pandemic. Is this a weather-vane for other activity too?
Our own poll, which is closed now, framed the question slightly differently, and asked whether people would be happy to share personal details in exchange for a drink or a meal out. The results were broadly similar to the ONS study, but we will revisit the subject when the final votes are counted.
In reality, we need better understanding of the business drivers to achieve economic sustainability. For example, demand and price sensitivity of goods and services will be driven by many factors, including attitude towards risk and data protection. In many cases the restaurants and shops that need the most help may see little increase in demand and profitability in the short term – vouchers or not – whereas the ones with queues outside may simply cash in ‘unscrupulously’ and unnecessarily from the government grants, thus creating an unnecessary tax burden for us all. It is heartening though, to see that some such as John Lewis and Primark are taking the moral high-ground.
My children and a number of their mates said Rishi’s Dishes – the subsiding of meals out between Monday and Wednesday – is a brilliant idea, dubbing it ‘Free Nando’s for students!’
Yet I must ask myself what Rishi is trying to achieve, and question who will be taking up the offer, given the widespread fears of eating out. Students? Teenagers? The intent to pump much-needed cash into an otherwise flailing hospitality industry is gallant, and almost certainly necessary in some capacity. If nothing else this is an interesting experiment in free market economics and price-based demand. Which demographic will value a bargain meal over risk or privacy? Will they be the ones with sufficient cash to generate the required demand? We will have to wait and see.
Much like the debate over intervention requests for the airline industry, which is essential for freight, business travel and holidays, this raises a question of where the government provides support – and how.
For example, if 5,000 people in hospitality lose their jobs, the state would be forced to meet the associated social welfare costs. So, on the face of it, investing a ‘similar’ amount of money through vouchers may provide a short-term increase in demand. Is that a solution? It rather depends on what next, and who next?
There is a difference between feeding people and giving them the tools to provide their own food. In a similar vein, paying businesses to furlough workers represents a short-term fix, but is not a long-term solution to suppressed consumer demand.
If we believe there is a place for Government support within the economy, then where should that be, and how should the money be spent? Manufacturers, for example, have highlighted the lack of support for those working in its sector, compared to hospitality. Are they, the airlines, or indeed others, not worthy or more support too?
Ultimately there is no silver bullet. Protecting short-term jobs, stimulating demand, creating consumers of the future, or investing in businesses to drive efficiency and sustainability… it is clear that we are living in a complex situation.
A similar dilemma is seen in the recent shift to working from home. Some in the media have argued for a more robust legal right to work from home. As a responsible employer that has embraced remote working during the pandemic, I believe this would be one step too far for the Government. Legislation, as currently is, should be there to protect people and businesses. But understanding the nuances of when a role should, or can be local or remote, is something for employers and employees to understand and agree based upon their specific needs and situation.
There is a fine line between rights and responsibilities. We all want a thriving economy, and for the revival in the UK’s fortunes to be V-shaped, and safe. We all want a secure, satisfying and sustainable income, providing enough to put food on our table, a roof over our head, and a few extras. Therefore, there has to be a trade-off, pandemic or not, between risk and reward. Whenever we sail the wrong side of either, we enter into troubled waters. Legislation will not solve the challenges ahead.
Leadership, teamwork, determination, resilience and endurance mixed with a little innovation – and supported by technology, and the ingenuity that drives it – will surely take us further.