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Reopening the property market during lockdown
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From the Queen’s Speech to the next election: what now for the government’s agenda?
From the Queen’s Speech to the next election: what now for the Government’s agenda?

Posts Tagged ‘covid-19’

The Omicron which stole Christmas

With the UK reporting its highest number of daily COVID-19 cases since the pandemic started yesterday – a new record high of 78,000 – the Prime Minister’s warning that people should “exercise caution” where possible is unsurprising.

For businesses that have survived a rollercoaster year of forced closures, tightly controlled capacity and lower footfall, the lack of Government support to tackle this latest challenge is a significant blow in a period where they usually do their best business. This is particularly acute in the hospitality sector, where lower consumer confidence and a flurry of last-minute cancellations have had a significant impact on businesses.

In 2020, the sector saw unprecedented intervention from a Conservative Government traditionally opposed to bailouts. The furlough scheme and VAT reductions helped many businesses weather the storm of prolonged national lockdowns, and the alcohol duty cut announced in this Autumn Statement was seen as a mark of the Government’s continued support for the sector.

Now, as pubs and restaurants are hit by a surge of cancelled bookings, the “party of business” seems to be taking a different approach. The rhetoric coming from Government points to the continuation of existing support measures and the fact that no outlet has been forced to close. However, there seems to be little acknowledgement that businesses will be hard hit by the behavioural changes prompted by increased case numbers and Government warnings to “socialise sensibly”, which has led to a wave of cancellations ahead of Christmas.

The Government’s thinking is not surprising. Last year’s interventions cost the UK economy billions and the long path to recovery set out by the Chancellor was a clear indication that similar action would not be taken again. It is clear that the Government will not intervene unless it is absolutely necessary.

However, with headlines majoring on UK Hospitality’s warning of far-reaching closures and job losses if steps aren’t taken to support the sector, coupled with news images of empty pubs and restaurants, pressure to intervene will surely mount in the coming days.

Rishi Sunak is set to meet industry representatives to discuss the case for additional support as consumer confidence continues to dip and cancellations continue to rise. At this point, it’s unclear whether the Government will act to stem the risk of further closures, but without it the sector faces further challenges in 2022 as the prospect of further restrictions becomes a reality.

In any case, all eyes are on the Government’s next move and any further intervention would set a precedent for future support in other sectors.

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The impact of Covid on international travel this summer and beyond

The article below was written by Pauline Guénot, a member of WA’s Investor Services practice.

While Prime Minister Boris Johnson declared that on 3 June there was “nothing in the data” to suggest a delay to the 21 June reopening target will be necessary, hopes of holidays abroad are still stymied by both testing and quarantine requirements, potentially jeopardising the recovery of the travel industry.

The UK is currently operating a three-tier “traffic light” system for international arrivals, which is reviewed every three weeks. Arrivals from countries in the red list require a 10-day hotel quarantine, while those from countries on the amber list are required to quarantine at home for 10 days and book tests for the second and eighth days. Arrivals from the green list – which presently includes only 12 territories – need not quarantine but are still required to take a test on the second day post-arrival.

Key barriers facing travellers

Ongoing restrictions to international travel will exacerbate the economic damage which the pandemic has done to the travel and aviation industry. According to the ONS, it has been the worst affected by the pandemic, with a fall to its lowest turnover rate in May 2020, at just 26% of February levels, compared with 73.6% in all other industries. The Minister responsible for tourism, Nigel Huddleston, has claimed that the government’s response to the travel industry crisis has been “immense” but, as yet, there is little sign of a sustained upswing in the industry’s fortunes, as the additional hassle Covid protocols entail continuing to deter travellers.

Firstly, the testing system has drawn criticism for its cost – up to £378 for the two tests for one individual. The government has been called upon to cap it to £50 by the Institute of Travel and Tourism, and to scrap the VAT on tests as a means of promoting the travel and aviation industry’s recovery. But the issues of testing go beyond cost. Private laboratories are already overwhelmed and travellers face delays in getting their results, demanding more flexibility around arrivals and departures. This problem is likely to be magnified if the green list is expanded in the coming months. Travel insurance has thus become a hot topic, and some travel companies might also offer packages including testing to ease travellers’ minds, like TUI which has partnered with Chronomics to offer the service from £20.

Industry experts have warned that summer holidays be thrown into further chaos by hours-long queues in airports created by onerous health checks at borders both upon arrival and departure. In response to lengthy waiting times, Heathrow Airport has pledge to lay on more staff and upgrade its passport e-gates, but such improvements will not be available until autumn 2021 at the earliest.

One of the key problems with the three tier “traffic light” system is that it cannot provide the certainty necessary to book holidays abroad very far in advance. The classification is guided by the analysis of factors including the country’s rate of infection, the prevalence of variants of concern, and the access to reliable scientific data and genomic sequencing. As a result, countries can move rapidly between the lists, in both directions; Portugal had only been added to the green list for a few weeks before being removed. The Nepal variant spreading in Europe is also currently making the headlines, threatening the green list’s expansion.

Towards a global understanding around Covid-19 certificates?

Before booking a trip to a country on the green list, British travellers must consider the entry requirements of their destinations, as well as the requirements for their arrival back in the UK.

The European Union has implemented a digital certificates system; travellers demonstrating vaccination, a recent negative PCR test or immunity from past infections are exempt from travel restrictions within the EU. If they succeed in reaching an agreement with the UK, British tourists could enjoy European trips as the continent’s restrictions are due to be lifted by the end of the month. Nevertheless, individual EU member states can still set their own rules when facing a deteriorating health situation or a new variant. For example, France and Austria recently tightened restrictions to prevent the Delta variant detected in India from spreading: a negative PCR test or a proof of vaccination is no longer sufficient to cross these borders. Over the summer, however, countries relying on tourism might not be so strict. Greece, Cyprus and Portugal are already open to British tourists, with Spain due to follow.

When it comes to crossing the Atlantic, the G7 summit taking place in London this month might answer that question. Boris Johnson will attempt to negotiate a quarantine-free air corridor with the US aiming at exempting vaccinated Americans from self-isolating upon arrival in the UK, in the hope of a reciprocal agreement for British citizens flying to the US. If he is successful, the current restrictions would be lifted in early July, allowing both British and American citizens to travel. However, the US administration has proven to be reluctant to lift the travel ban, arguing that prioritizing countries with a successful vaccination programme would send the wrong message to developing countries benefitting from the Covax scheme.

Holidaymakers must therefore remember that for travel to be possible, a reciprocal agreement between countries has to be reached. While Australia is on the UK’s green list, for example, limitations in place by the Australian government still prevents British nationals from landing on their territory. Furthermore, travel regulations are highlighting broader political motivations: the United Kingdom had to consider different variables, not least its hoped-for bilateral trade agreement, before placing India on the red list.

A digital and sustainable model of tourism ahead?

Electronic Covid passports along the lines of those currently operating in the EU might be the first illustration of a more digital model of tourism. As a result of Brexit, summer 2021 will be the last time that EU citizens will be able to travel to the UK with their identity cards (rather than their passports). Priti Patel confirmed that the new requirements would take effect from October onwards.

She also plans to introduce an Electronic Travel Authorization system, similar to the ESTA in the US. Also being considered by the EU, the ETA would see all visitors without a visa or immigration status charged a fee, and would be in place from 2025. As yet, the government has not given an indication of how much the system will cost each visitor.

A longer-term impact?

Ongoing restrictions and changeable regulatory requirements may mean that the travel industry does not recover to anything like 2019 levels of activity much before 2023, so pressures on the traditional approaches to mass-market tourism will remain even when the immediate trauma of the pandemic recedes. This may compound longer term trends of heightened environmental awareness about both the impact of air travel, and the impact of large numbers of visitors in potentially sensitive ecological areas.

Business travel will inevitably change as well, with virtual conferences becoming much more commonplace and, where necessary, longer trips blending work and leisure activities seen as the norm. Investors will want to pay close attention to such developments in order to stay ahead of what promises to be a rapidly evolving picture.

 

 

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Balancing the health of the nation with the health of the economy – 10 key takeaways

On 15th October WA hosted an event exploring the difficult decisions facing government in balancing the health of the nation with the health of the economy.

With a second wave of Covid-19 upon the UK and much of Europe, political, media and public pressure is building, and a difficult winter is approaching.

We brought together an expert panel to consider the issues, hosted by WA Director Caroline Gordon. The speakers included Tom Newton Dunn (Chief Political Commentator and Presenter at Times Radio), Poppy Trowbridge (former Special Adviser to the Chancellor and WA Advisory Board Member) and Dr Jonathan Pearson-Stuttard (Epidemiologist at Imperial College London).

It was a wide-ranging debate (watch here if you missed it), but what were the key takeaways?

Here are our top 10 points made during the discussion:

 

1) The prosperity of a nation is inextricably linked to the health of a nation:

The pandemic has taught us the value of public health cannot be underestimated. A legacy of Covid-19 must be a proper review of how we approach public health and what we ask of the NHS.

 

2) Devolved and regional politics has grown in power:

With healthcare devolved to national governments and Metro Mayors exercising influence over local lockdowns, leadership over the pandemic has often come from politicians not based in Westminster. What will this mean for the Government’s agenda beyond Covid-19?

 

3) Government is still stuck in campaign mode and not thinking long term

It’s no great surprise that a government of campaigners would think in campaign terms, but their focus has been too short term and the messaging too ambitious. With the pandemic creating complicated and long-term challenges they need to find a more nuanced way of communicating.

 

4) The libertarian principles of the Government are holding it back from decisive action

The restrictions being introduced to manage the spread of the virus are unprecedented for any democratic government, but they particularly jar with the PM’s brand of libertarianism. That conflict, manifested in hesitation and delays about enacting measures, has surfaced repeatedly through the crisis.

 

5) No 10 and No 11 have been closely aligned, but that could be fraying

There has often been tensions between the inhabitants of No 10 and No 11 Downing Street, but in Boris Johnson and Rishi Sunak there has been unusual harmony up to now. That consensus, however, is coming under strain with the Treasury keen to focus on keeping the economy moving and resistant to overly restrictive measures. How this relationship plays out could come to define the rest of this government’s term, particularly with the Chancellor being tipped as the most likely successor to the PM.

 

6) Internally government realise ‘Test & Trace’ is not working

With no clear vaccine timetable or even the promise that one will work, NHS Test and Trace is the only route back to a degree of normality. A fully functional test and trace system was the only reason SAGE agreed to the unlock over the Summer, but the Government’s centralised approach has been beset by problems. Whilst they have not publicly admitted it, quietly they are beginning to shift people and resources towards local test and trace approach which has been much more effective.

 

7) The government could do a lot more to help businesses navigate the crisis

Government offloaded too much responsibility onto businesses and were not clear about how long restrictions were likely to be in place. This uncertainty has meant businesses can’t plan effectively and many have taken an understandably cautious approach because of this. With unemployment rising, the Government needs to find a way to give business the confidence to invest and create jobs.

 

8) The public consensus is fragile compared to the first wave

People feel ‘cheated’ by being ask to lockdown again – they were willing to trust the process first time around, but a lack of faith in the government a second time around (not helped by the Dominic Cummings affair) could undermine the effectiveness of measures for the second wave.

 

9) England and Wales has one of the worst excess death tolls in Europe

Dr Jonathan Pearson-Stuttard’s research has shown that excess deaths in England and Wales were 37% above normal, second only to Spain’s 38% as the worst performance in Europe. When the public inquiry into the handling of Covid-19 finally comes, there will surely be questions to answer.

 

10) The Government’s long-term ambitions are on hold

It may not feel like it, but we are still in the early days of this Government. Elected back in December 2019 with a strong majority, the crisis has put the brakes on the broader policy agenda as they battle to tackle the virus and shore up an unstable party. The Government is a long way from making strides on its domestic agenda, businesses need to try to understand what each Department is trying to achieve despite the virus and bring solutions and opportunities for good news.

 

These are just a handful of takeaways from a wide-ranging and fascinating discussion, you call watch the full video exploring how to balance the health of the nation with the health of the economy here.

 

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The Winter Economy Plan explained

Chancellor Rishi Sunak has this afternoon delivered his Winter Economy Plan to the House of Commons.

In response to the recent rise in Covid-19 cases and the introduction of new restrictions expected to last for the next six months, the Chancellor cancelled the planned autumn Budget and instead made a short statement on the government’s immediate plans to support jobs and the wider economy over the winter. Before the statement was delivered in Parliament, Sunak was pictured outside No. 11 with the heads of the CBI and the TUC, signalling this was a set of measures that had the endorsement of both businesses and workers.

The decision to cancel the Budget, which would have included details of the government’s long-term fiscal recovery plan, was only made over the last few days. Today’s announcement reflects a recognition that the potential impact of a second wave of Covid-19 has made longer-term economic planning difficult and the government needs to take a flexible approach to the economic challenges ahead. The government has today taken the opportunity to act quickly to prevent a sudden increase in unemployment following the end of the furlough scheme in October and instead allow for a more manageable increase in unemployment.

Officially the government is still aiming to publish a multiyear spending review before the end of the year that would set out departmental budgets until 2024. However, a more likely scenario given the economic uncertainty is for the government to publish a one-year settlement to allow departments to plan for 2021/22. It is expected that the next full Budget will take place before the next fiscal year, likely in March 2021.

The main elements of the Chancellor’s Winter Economy Plan are:

The expected value of the package announced is around £5 billion, leaving the government with more firepower to support the economy should Covid-19 restrictions become more severe. Anneliese Dodds, the Shadow Chancellor, said it was “a relief” government had U-turned on the need for more support for workers but criticised the government for not acting soon enough. Paul Johnson, Director of the Institute for Fiscal Studies, has also warned that the limits of the new Job Support Scheme mean that the UK will see a large rise in unemployment over the winter.

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Summer Statement 2020: Key Points

The Chancellor has this afternoon given a summer statement to the House of Commons on the government’s economic response to Covid-19.

He said the government was moving the country through three phases, and it was entering the second phase with a ‘plan for jobs’. The third phase, which will focus on the ‘plan to rebuild’, will come in the autumn through a Budget and Spending Review.

He noted that public finances would have to be put on a sustainable footing in the medium term, but he would not accept mass unemployment as unavoidable.  This was outlined in the context of the IMF expecting the deepest global recession since records began, the OBR predicting significant increases in unemployment and the economy having contracted by 25% in just two months – the same amount it grew in the previous 18 years.

He confirmed the furlough scheme would be wound down flexibly and gradually, continuing until October, as measures were introduced to support, create and protect jobs.

On supporting jobs, he announced:

 On creating new jobs, he announced:

 On protecting jobs, he announced:

The Summer Statement will be followed by an Budget, expected in October or November.

 

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Webinar – Balancing the health of the nation with the health of the economy

On Thursday 15th October 2020, WA Communications Director, Caroline Gordon, hosted a webinar exploring how the Government can balance the health of the nation with the health of the economy.

We are living through unprecedented times in which a devastating public health crisis is creating a global economic slowdown.

The Government has to make daily decisions that balance the health of the nation against the health of our economy. Political, media and public pressure is building and a difficult winter is approaching. There are no easy answers – just more questions facing every business and organisation in the UK as to how to respond, plan and communicate.

Panellists included:

 

Watch a recording of the webinar:

 

 

 

 

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Webinar – From Whitehall to Town Hall

On Monday 23rd November 2020, WA Communications Director, Naomi Harris, hosted an expert panel to explore whether the Covid-19 pandemic has caused political power to shift permanently from national to regional and local government.

Watch the discussion to explore:

The panel was comprised of:

  • Joe Anderson, Liverpool Mayor
  • David Collins, Northern Correspondent, Sunday Times
  • Poppy Trowbridge, Former Special Adviser to the Chancellor and WA Advisory Board Member.

 

 

Watch a recording of the webinar:

 

 

 

 

 

 

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Billed, Billed, Billed – the government sets out its economic recovery mission

WA’s Naomi Harris analyses the Prime Minister’s speech for what’s getting top billing; how big the bill will be; and what Bills we can expect to follow as he promises to ‘build back better’.

What’s getting top billing

The Prime Minister has earmarked £5 billion to ‘accelerate’ infrastructure to create jobs and support his ambition to ‘build back, better’. To turbo charge the stalled delivery of his ‘levelling up’ agenda and to invest in public goods that aid future prosperity, Johnson is carving up the money for capital spending in health, education and local infrastructure projects – the majority to be spent in the next two years.

The Chancellor is expected to go further next week when he delivers his ‘mini Budget’. Although Number 11 is keen for this not to be seen as an ‘emergency Budget’, it will be presented against a backdrop of the worst quarterly GDP figures since 1979 and, so far, the first local lockdown.

It will again focus on job retention with more detail on changes to employment and business support mechanisms and a potential temporary cut in VAT to help stimulate demand. We can also expect more from the Chancellor on job creation with further information on the earmarked ‘shovel ready’ projects and plans to support a ‘green recovery’. These two speeches are, however, stepping stones towards the much anticipated – and much delayed – National Infrastructure Strategy, now slated for the autumn.

How much the bill will be and who will pay

Uncertain about tax receipts and with public borrowing soaring, some have said that £5 billion is too much on top of the £298 billion that the ONS has said could be the final bill for existing support measures. Others say that £5 billion is a drop in the ocean if the Prime Minister truly wants to “use this crisis to tackle this country’s great unresolved challenges of the last three decades”.

It is undisputed that this government has thrown off austerity and has a new outlook. Ministers are happy to acknowledge where mistakes were made by previous Conservative governments and in his speech the Prime Minister spoke of a government that is “powerful and determined and that puts its arms around people at times of crisis”. Positively Keynesian, although this Prime Minister prefers the Roosevelt comparison.

In all of this it should be recognised that the Prime Minister’s ‘New Deal’ is not just about government spending but rather incentivising private sector investment. Just like Roosevelt, who created the Reconstruction Finance Corporation to design lending systems and new finance mechanisms to draw private investment into projects and insulate business from risk, Johnson is looking to encourage business to stump up capital through regulatory changes. Could this be the time for a Contract for Difference 2.0 or PFI 3.0?

The British taxpayer will undoubtedly be asked to start paying in eventually, but exactly who and when is an open question. Those who have been seen to do well from the crisis are likely to be at the top of the list for a windfall tax.

The Bills that we can expect to follow

We can expect the legislative pipeline to increase significantly in the tail end of this year as the government seeks to put its policy ambitions into action. The return of key personnel to Downing Street combined with rumours that the Cabinet Office and Number 10 may merge speaks of a government looking to increase its firepower on delivery.

 

 

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Under the microscope: M&A faces new post-Covid world

As most European countries appear to have passed through the peak of the coronavirus pandemic, governments have turned their attention to how to bring the economy back to life. It is becoming clear across all countries affected by the virus that one of the consequences of lockdown will be a wave of businesses entering administration or facing a fundamental restructuring of their operations.

Governments, ranging from populists in Poland and India to fiscal conservatives in Germany, are concerned that the number of businesses looking for new ownership will lead to foreign buyers acquiring assets in bulk. To tackle this, they have turned to protectionist policies to keep prospective buyers out.

Protectionist tendencies were becoming more common before the coronavirus pandemic

The economic policy response to coronavirus is likely to continue to vary significantly across the Eurozone and beyond. However, one emerging trend is the number of countries, including the UK, that are introducing legislation designed to increase scrutiny of M&A transactions on national security grounds. Primarily designed to exclude foreign buyers from purchasing assets of national importance while prices are lowered by the coronavirus pandemic, the wider effects of these laws may make cross border M&A a more complex task for all investors in the future.

The willingness of governments to intervene in M&A has been increasing in recent years. Australia and the United States have been particularly interventionist and have been hawkish on the issue of Chinese investment, both banning Huawei from helping build 5G networks. Although the UK to date has not blocked an M&A transaction on national security grounds, in recent years the Competition and Markets Authority (CMA) and UK government has scrutinised an increasing number of transactions on national security grounds involving various kinds of acquirer, including financial investors. Acquisitions of Cobham, Northern Aerospace and satellite operator Inmarsat have all been investigated by the CMA and the transactions approved. In all instances, the acquirer offered several legally binding assurances to the government before the deal was approved.

The government is taking rapid action to protect strategic industries

Here in the UK, Boris Johnson, Rishi Sunak, Alok Sharma and Dominic Raab are currently developing new legislation that would make it easier for the government to intervene in M&A transactions on national security grounds. In the short term, amendments will be put forward to protect UK assets during the coronavirus pandemic, however, a more detailed plan for a new, more interventionist takeover system is being drawn up and will be presented to Parliament before Summer recess.

Two new proposals already tabled in Parliament will make it tougher for foreign buyers to acquire any assets related to the nation’s healthcare self-sufficiency and, separately, artificial intelligence and other tech. One amendment would drop the £1 million revenue threshold currently in place for screening takeover targets in AI and other areas that pertain to national security. This would allow the government to intervene in the takeover of loss-making start-ups developing medicines or technology of national interest. The other amendment will widen the government definition of sectors critical to national security to include the food and drink sector for the first time.

Crucially, neither of these amendments specify what kinds of investors will be targeted under the new legislation. While concern may rest primarily with state-owned buyers, investors should be mindful that the CMA has instigated action against several US funds in recent years, including in the sale of Cobham and Inmarsat indicating the importance of the asset will take precedence over the nationality of the buyers.

A new long term takeover regime will change how investors should approach UK assets

The new takeover regime being devised would require UK businesses to declare when a foreign company tries to buy more than 25% of its shares, assets or intellectual property. The plans are significantly more stringent than those drawn up under a similar scheme considered by Theresa May’s government, under which companies would have been expected to notify the government of takeovers voluntarily.

Reporting will only be required for businesses where a takeover would pose a risk that it could give a foreign company or hostile state the power to undermine Britain’s national security through disruption, espionage, or by using “inappropriate leverage.” The significance of this legislation will be determined by how this risk is defined. Legislation planned under Theresa May used an incredibly broad definition, which, if replicated, would allow any secretary of state to intervene in any M&A transaction if they were concerned about the security implication.

The sectors most likely to be affected are civil nuclear, communications, defence, energy and transport, however compulsory reporting of transactions would likely have the effect of slowing the pace of deals across all sectors. Investors, whether they deal with sensitive assets or not, are likely to have to get used to greater government interest in their activities, an increased reporting burden, and potentially greater media scrutiny of their activities as the government makes its investigations public.

Change in the EU brings challenges and renewed opportunity

Countries across Europe are also acting. Margrethe Vestager, EU Competition Commissioner and Executive Vice-President of the European Commission, has encouraged EU states to take action to prevent foreign takeovers. Describing the protection of EU businesses from takeovers as a “top priority,” Vestager has effectively encouraged states to act against any takeovers deemed to be a cause for concern.  While this fear relates primarily to Chinese investors amid concerns about intellectual property and national security, the political unwillingness to single out the Chinese for special restrictions could risk creating significant collateral damage. Plans put forward by the Commission would exclude all state owned buyers, potentially eliminating some of the competition for assets created by the increasing activity of Middle Eastern and Asian funds in Europe.

Poland’s populist government is among those planning changes. Legislation is currently being drawn up to allow regulators to block non-EU companies from taking stakes of more than 10% in businesses deemed to be providing critical infrastructure, goods or services for two years. This more stringent block on foreign investment is in part due to the comparative affordability and availability of Polish businesses. 30 years on from the end of communism in Poland, those who have built successful businesses are beginning to reach retirement age, while a drop in the value of the zloty has also pushed prices lower for foreign buyers.

The issue for investors comes back to Brexit. Much of the proposed legislation would impose additional restrictions on all non-EU countries. Proposals, such as those put forward by the Dutch government, would ensure governments could halt companies from buying EU competitors at inflated prices or undercutting them with artificially low selling prices. The Spanish government, meanwhile, is proposing that non-EEA investments larger than 10% in key domestic assets in the “strategic industries” such as infrastructure, technology and media be authorised by the Spanish government. The European Commission would also have the authority to demand greater transparency in foreign companies’ accounts.

These restrictions will soon apply to the UK, with the true impact likely to be determined by the extent to which the UK chooses to diverge from EU law relating to financial services. It may be possible to negotiate the UK’s exclusion from these additional barriers to investment if the UK and EU agree to a close trading relationship for the financial services sector. This would be unlikely to be completed by the time the UK leaves the transition period on 31 December and negotiations around the full financial services future relationship are likely to take years to complete due to their complexity.

Much of the legislation remains in draft phase across the EU and the UK as politicians continue to prioritise the immediate economic and health challenges and much will depend on whether governments can pursue such ambitious regulatory change in the coming months. If these laws do make it onto statute books, investors willing to deal with the additional bureaucratic burden may find greater choice and potentially lower competition for assets in areas of “national interest.” Regardless of sector, as the size of government increases and its post-Covid appetite for intervention grows, investors will need to adapt to greater government engagement in the future.

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Government’s Covid-19 response: What it means for private equity

The government’s response so far to the Covid-19 pandemic provides for a mixed report card.

Disasters have been averted in the NHS, but death numbers are among the highest in Europe and coronavirus is having a devastating impact on care homes. Questions about the timing of lockdown and the government’s testing infrastructure also remain. The government’s business support measures have been more successful. The furloughing scheme has undoubtedly saved hundreds of thousands, if not millions, of people from unemployment and credit is finally making its way to businesses who need it via the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme (CBILS).

Private equity firms and their portfolio companies have not been at the front of the queue to receive government financial support, nor have they been at the forefront of the government’s mind throughout the policy development process. The furloughing scheme has allowed portfolio companies to keep staff on the payroll, while the government subsidises their wages, and the news the scheme will continue until October provides certainty to both workers and management teams for the next few months at least.

CBILS, when it was announced in March, gave the impression that it could provide a vital line of credit to support the liquidity of many private equity-backed portfolio companies. CBILS allowed firms with a turnover of less than £45 million to borrow up to £5 million, with 80% of the loan backed by the government.

However, many portfolio companies were ineligible for the loans as turnover was originally calculated on a group basis, taking into account the portfolio as a whole. This rule was later relaxed to allow portfolio companies to apply as separate entities for the government-backed loans, alongside the introduction of the Coronavirus Large Business Interruption Scheme (CLBILS) that provided credit to firms with turnover over £45 million. CLBILS was created after it was pointed out to government that many firms were too large for CBILS but were not of investment-grade so could not access the Bank of England’s Covid Corporate Financing Facility (CCFF).

Just when private equity firms thought it was possible to dip their toes into this new pool of credit, another issue raised its head that has proved to be a significant barrier to portfolio assets accessing the government-backed loan schemes.

Under EU state aid rules, firms that had accumulated losses greater than half their subscribed share capital as at 31 December 2019 are not eligible for government support as they are deemed to be a ‘business in difficulty.’ Due to the leveraged structure of the vast majority of private equity portfolio companies, this rule has made them unable to access CBILS and CLBILS.

Both the British Private Equity and Venture Capital Assication (BVCA) and the Confederation of British Industry (CBI) are currently lobbying the EU Commission to change the rules, but so far the Commission has held fast.

The saga of how the government’s various support measures have arguably fallen short in supporting PE-backed companies illustrates two important facts about government.

The first is that the old adage about not wanting to see how the sausage is made still holds true. The government has had to conduct policy development that would normally take years in a matter of months, with every mistake or problem that would have been caught along the way being made in full view. Fortunately, industry groups like the BVCA, and expert advisers supporting individual investors have been on hand to support the government and ensure the measures have been refined enough to help the majority of businesses.

The second is that while government has been willing to make some concessions to private equity, the sector is clearly nowhere near the top of the government’s agenda. This partly comes down to a lack of understanding of how the private equity model works, for which the industry itself must take some responsibility. If policymakers buy in to many of the enduring myths about the sector –  that UK private equity firms are sitting on huge amounts of cash that could be deployed to support their portfolio companies – for example, there is little incentive to go to any special lengths to provide them state-backed financial support

The post-coronavirus recovery will offer private equity firms the ideal opportunity to rectify this problem and ensure a more prominent position in the government’s thinking. By demonstrating how private equity firms bring expertise, innovation and growth to businesses in all sectors across the UK, private equity can make its case that it is a force for good.

Government will be looking for every opportunity to promote growth and investment, and private equity firms will be in a strong position to contribute to this.

 

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5 ways communications will change after Covid-19

Covid-19 has enforced a huge impact on all our lives, professionally and personally, and has caused a huge shift in the way we communicate with each other.

The Microsoft CEO, Satya Nadella, summarised the change by saying that “We’ve seen two years’ worth of digital transformation in two months”. Looking beyond this incredible rapid change to the channels we are using to communicate, there has also been a noticeable shift in how businesses are talking to their staff, customers, investors and broader stakeholder community.

But how much of that has been a necessary response to the crisis, and what will endure as lockdown measures are eased?

We take a deeper dive into five things that have changed for good in the communications landscape:

 

1) How businesses communicate

The nature of the Covid-19 crisis has forced businesses and leaders to communicate frequently and openly to employees, customers, shareholders and suppliers.

We have quite literally seen into each other’s lives through a constant stream of video calling, a previously undreamt-of insight into our colleague’s personal lives.

This transparency has forced leaders to embrace authenticity, be more empathetic and available than they would have been ordinarily, which has been valued by employees.

Remote working is likely to endure for the foreseeable future, but even once things return to a more normal footing businesses and leaders would do well to maintain regular and authentic communications – their stakeholders will now be expecting it.

As the situation evolves, businesses are going to need to think strategically about how they manage their communications across a variety of scenarios and channels depending on what the recovery looks like.

Planning for this should be a top priority.

 

2) The value of being seen as a responsible business

Consumers, regulators, MPs, government, employees (both current and future) and the media have all been watching how businesses have behaved during this crisis. Select Committees are already holding inquiries into how some industries have behaved.

Business who have taken financial support from the government whilst paying out dividends or bonuses will be questioned; high executive pay will look even more unpalatable in an era with potentially record levels of unemployment.

This increased scrutiny will only increase the importance of corporate responsibility, or ESG (environmental, social and governance) as it is called in the investment world.

Businesses will need to be able to demonstrate their impact above and beyond profit – their tax strategy, social impact, climate strategy, supply chains, employment practices will all be under the microscope from a variety of stakeholders.

Companies that don’t have a positive story to tell on responsibility will need to develop one. And organisations who want government to listen will need to be able to show they have a positive, helpful and responsible impact on society.

 

3) Resilience, risk and crisis preparedness

Every organisation’s business continuity plans have been tested over the past few weeks and going forward more organisations will take risk planning seriously.

The new reality will demand it – every business will need to make judgement calls about acceptable levels of risk for their employees to return to work and how they operate over the next 18 months.

Reputational risks will be rife in the ‘new normal’, businesses will need make sure they are ready. Organisations without crisis communications plans and risk registers, regularly updated and reviewed as standard, will also put these in place so they are prepared for the next time.

Stakeholder lists need to be reviewed and updated, channel strategies and messaging refreshed, and tone of voice carefully adjusted.

Leaders should think about ensuring their media training is up to scratch, their knowledge of the messaging locked down.

Finally, businesses should make sure they appoint dedicated issues and crises team with clear roles and responsibilities assigned.

Some will already have all of this in place and will simply need to review and update, others will be starting from scratch.

In the ‘new normal’ not being prepared is not an option.

 

4) Government will be looking for solutions

The financial impact of Covid-19 for the public purse will be felt for years to come – bailout measures plus significant reductions to expected tax income will threaten the Government’s ambitious spending plans unveiled in the Budget just a few short weeks ago.

The government will be looking for creative ways to plug that shortfall, but where to target tax rises will be highly controversial.

To make matters worse, don’t forget this is a newly elected Government, elected by a swathe of new Conservative voters in traditional Labour seats who’s battle cry has been to “level up” Britain.

However, what is a headache for the Government is an opportunity for business.

Creative, bold and eye-catching policies, assuming they have minimal or even positive revenue implications, will be welcomed.

Anything that can be seen to contribute to the recovery from Covid-19 or creates jobs will be listened to.

It seems a way off now, but with an election in 2024 businesses should think about how they can help the government find a legacy that can they can take to the ballot box.

 

5) The return of the experts

During the 2016 Referendum, Michael Gove famously told Sky News that “people in this country have had enough of experts” and for much of the following years that appeared to have been prophetic.

Emotion, rather than evidence, has been in the ascendancy, with how they voted in the divisive 2016 ballot seen as the decisive motivating factor behind decision making.

Covid-19 has turned all of that on its head, the experts are back.

The Government’s entire communications message has been that our response is “led by scientists”, even to the extent of giving unprecedented airtime to the Chief Medical and Chief Scientific Officers, roles few in the general public would previously have been aware of.

In the post-Covid environment businesses will have an opportunity to offer their expertise to government and position themselves as authorities in areas where they have specialisms. We have seen how government is keen to work with businesses during the crisis through programmes like the Ventilator Challenge, and that mindset will continue through the recovery.

Where organisations can provide evidence bases, insight or add to the public discourse they should seize those opportunities, people will be listening.

 


 

As we move into Phase 2 of the Covid-19 crisis, there will be continued uncertainty to navigate we tentatively ease elements of the lockdown.

Some businesses will be aching to revert to normality as soon as possible, but things will not go back to the status quo – markets and attitudes will have evolved in response to the pandemic, and not all businesses will respond to their new environment.

As we discover what the ‘new normal’ looks like, those that succeed will have learnt some valuable lessons from the past few weeks, not just about video calling and remote working, but fundamental shifts in how they can and should approach communications.

Those that heed those lessons can flourish, for those that don’t there may be more challenges to come.

 

 

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Are we still in the midst of an electric vehicle revolution?

The government’s 2035 ban on petrol, diesel and hybrid vehicles is under threat in the wake of COVID-19. With strong political and societal forces now in play, the government and industry face difficult decisions.

The risk is two-fold; the government may concede to pressure from some parts of a troubled automotive industry by relaxing its 2035 target; or a simple lack of policy action will make it far harder to meet the target in reality, even if government sticks by it on paper. The inevitable hampering of supply and demand will also make it harder.

Either way, industry will need to make a compelling case to government if it wants electric vehicles to remain a genuine priority policy area.

The government, meanwhile, needs to adapt its electric vehicle strategy in a way that reflects the new reality and has an opportunity to frame this as a key pillar of a green, economic recovery agenda.

 

COVID-19 changes everything

 

The world has fundamentally changed in the last two months.

For electric vehicles, supply is now a huge issue in Europe. Delays in global vehicle production is now likely as sourcing batteries and parts is very hard to do outside China without incurring much higher costs, especially considering China has far more lithium reserves and much greater lithium production than any other country.

Fiat has already implemented temporary closures at some of its Italian plants with others likely to follow, with the risk of a longer-term reduction in production capacity resulting from plant closures or delayed investment. In the UK, the likes of Nissan has today said it will begin building cars again in June having suspended production six weeks ago.

Even more significant, however, are the societal and economic changes arising from COVID-19, some of which serve to reinforce the case for electric vehicles whilst others hinder it. For example, the links being made between COVID-19 deaths and air pollution could increase the demand for cleaner and greener vehicles. A recent RSA survey found that over half of respondents had seen an improvement in air quality since travel restrictions were enforced.

Big questions are also emerging over the future of public transport. Auto Trader found 48 per cent of consumers were less likely to use public transport after the lockdown. Though this could lead to a rise in demand for electric vehicles in the longer term, equally, in the short term it could push people into buying dirtier (and now cheaper considering falling oil prices), CO2-emitting vehicles, or micro mobility solutions such as bikes or scooters. The former could potentially hinder the take up of electric vehicles, as could the latter as people look to replace shorter journeys with walking or cycling, thereby missing the window of opportunity to promote EVs as the natural solution.

 

Electric is still the answer

 

One fact remains clear; the drive to zero carbon and the increasing evidence of the harmful impact of air pollution mean electric vehicles remain an important long-term strategic play for the automotive industry, alongside hydrogen and other biofuels.

Yet take-up in the UK remains extremely low. March saw the number of new battery-electric vehicle (BEV) registrations number 11,694. That’s 4.6 per cent of a UK total market that was down 44.4 per cent. These numbers have been quickly dismissed by experts as distortions to what’s really going on. Yes, sales of electric vehicles are rising, but nowhere near as fast as March’s figures suggest. So, if March is just an anomaly then a more important question is what government should do to increase supply and demand of electric vehicles in both the short and long-term.

In the short term, despite extending its consultation deadline (from the 29th May to the 31st July) on bringing forward the ban on sales of new petrol and diesel vehicles, the transition to electric vehicles remains a key strategic pillar of the green agenda for government and the automotive industry. Government grants (including extending the plug-in car grant at the last Budget) and tax incentives have no doubt helped create the beginnings of an electric vehicle market in the UK but for manufacturers, another big driver of supplying these cars in the first place is the EU’s strict requirements when it comes to carbon dioxide emissions.

For consumers, they need the confidence now more than ever that they can buy an electric vehicle at a reasonable price. They also need to know they will have enough charge points along their route and that when charging their vehicle, the experience will be as quick and affordable as possible.

Existing commitments include ensuring every person in England and Wales is within 30 miles of a charging point; investing an extra £500m on a fast-charging network; and boosting funding for high-tech research by £9bn over the next five years. These will be important in giving consumers the confidence they need. However, government must implement these policies immediately, or at the very least accelerate them through releasing funds over a shorter 3-year period.

Furthermore, as provided for in the Automated and Electric Vehicle Act (2018), government also has at its disposal the powers to be more prescriptive with what it requires from charging providers in connection with standardisation across provider payment methods. Making use of these powers could provide a more seamless consumer experience, helping drive confidence, greater uptake of electric vehicles and, ultimately, help provide some much-needed economic stimulus.

 

The (green) road to recovery

In the longer-term, the government’s attention will turn to driving economic recovery.

One approach to this could be to double down on its climate change commitments as part of a ‘Green Recovery’ agenda, similar to Labour’s “Green New Deal” which would have seen a state-led investment programme to reduce greenhouse gas emissions in as fair a way as possible.

The policy thinking to support such an approach is already emerging; the International Renewable Energy Agency recently found that accelerating investment in renewable energy could generate global GDP gains of almost £80tn between now and 2050.

Electric vehicles would obviously need to be a key pillar of such an approach.

A green recovery agenda that prioritises the clean energy transition with a specific emphasis on its electric vehicle plans, could drive significant investment required to spark an economic recovery. Conversely, failure to prioritise these issues will be a major missed opportunity.

 

Industry’s role

COVID-19 has presented the government with a significant window of opportunity to pursue a clean energy system that aligns economic stimulus and policies with environmental goals.

However, there’s no guarantee this will happen.

So, for those with a vested interest in the development and take up of electric vehicles, getting out early and making the case for a green recovery will be crucial for realising the electric vehicle revolution.

We may not be in the midst of a revolution right this second, but with a little bit of refocusing from government and constructive engagement with industry about what needs to happen and how, we can soon be on our way.

 

 

 

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How your business will need to communicate as the lockdown changes

There is no doubt it’s time for businesses to prepare for their second stage of communications in response to the Covid-19 lockdown.

The first phase of communications we all witnessed firsthand: the urgent rush to communicate changes in business practices to employees, customers and beyond, along with rapid government lobbying, in response to the lockdown.

But there is a shift happening now that the country is trying to define how and when lockdown will end – or continue to change shape over the coming months. This ‘new normal’ is going to require even more sensitivity in how businesses communicate their messages.

This crisis has impacted every business, whether for good or bad, and certainly every individual.

Communications that now ignore such a seismic change will be seen as inauthentic and simply won’t resonate with audiences. Remember, good communication always focuses on understanding your audience: and every business is guaranteed that their audience is thinking about Covid-19 and how it will continue to impact their personal life.

All businesses need to apply a new lens to their communications as a result.

This means the tone of voice and nuance of your messages are more important than ever. A tokenistic nod to Covid-19 in your communications won’t suffice.

It’s time to take a thoughtful look at how you can adapt your company’s messages to maturely acknowledge the worry that is in the community, along with the very real need for businesses to be moving ahead with their economic recovery.

Our recent webinar unpacked this change, exploring how businesses can practically manage their communications during this time.

We hope you find this advice useful as you take a look at your messages, the different scenarios you are planning for, the channels of communication you are using, and tips for communicating with your different audience groups.

It’s likely not going to be ’business as usual’ for some time still. So don’t make the mistake of ‘communications as usual’.

 

To watch a recording of WA’s recent webinar ‘After the Shock: Managing the Recovery’ please enter your details below:

 

 

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Exit Strategy: What can the UK learn from European countries’ plans to ease the lockdown?

Despite the UK lockdown being extended for another three weeks, much of the focus is starting to shift to the exit strategy; when and how might we see some of the restrictions lifted?

The UK Government is alive to this and the need to give citizens a sense that there is “light at the end of the tunnel” as  Dominic Raab put it in yesterday’s briefing.

The extent to which epidemiological or behavioural theory is driving the government has been much debated, with the UK’s relatively slow move towards social distancing and then lockdown supposedly driven by fears of ‘behavioural fatigue’ if measures were put in place for too long.

An end in sight?

Understandably, however, it is to our neighbours in mainland Europe that the Government may look for ideas on exiting lockdown, with most countries a few weeks ahead of the UK in dealing with Covid-19.

On Wednesday the European Commission put forward a “roadmap for common lifting of containment measures” to provide a pan-EU standard, but individual member states had already moved to announce partial relaxations with some already reopening schools and retail.

A full list of current exit strategies is detailed below.

What does it mean for the UK?

From the measures announced, it’s clear that there are some similarities among those countries beginning to ease lockdown, with incremental lifting of restrictions focused on schools and some retail a common approach. It is logical to think the UK will follow suit.

What is interesting is that no country is adopting a demographic-based approach, such as releasing young people from lockdown first, a potential measure widely covered in the UK press following a paper from the University of Warwick’s Department of Economics.

UK Timescales

The big question then becomes when lockdown might be eased in the UK. With Boris Johnson out of action for a few weeks making his own recovery from Coronavirus, people are beginning to look towards the bank holiday on the 8th May for his return and an announcement about easing the lockdown.

This week Dominic Raab also outlined five assessment points that the government will use before any lockdown can be lifted. These are:

  1. that the NHS has sufficient capacity to cope with the number of coronavirus patients across the UK;
  2. that there is a sustained fall in the death rates from Coronavirus;
  3. that data shows infection rates are decreasing to a ‘manageable level’;
  4. that testing capacity and the quantities of PPE can meet any future demand;
  5. and that any adjustment to the measures will not risk a second peak in infections.

As usual in Government, there will be a conflict between Departments looking to exert influence – between the Treasury pushing the relaxation argument to minimise the economic damage and the Department of Health and Social Care who will be understandably cautious about the public health impact.

However, one of the biggest drivers on the timing just might be the PM’s personal journey back to full health.

It will need his authority to balance competing Ministers and Departments and his public profile to deliver effective cut-through to a nation that has been isolated for, by that time, six weeks.

 

 

Lockdown Europe: how other countries are relaxing measures

 

Austria

Denmark

France

Germany

Italy

European Commission

 

 

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Energising our way to a recovery: How have priorities in the energy sector been impacted by COVID-19?

In recent weeks, the outlook has changed for every sector of the UK economy and energy is no exception. WA takes a look at how government and Ofgem have responded to the COVID-19 crisis, whether their priorities have changed and the emerging opportunities for businesses in the energy sector.

Where are we now?

April should have been the month that the government sold us their vision for the energy sector, yet they have been forced to postpone the release of their White Paper to focus efforts on ensuring consumers are protected during the ongoing pandemic. Similarly, Ofgem should have been actioning its work programme, but they are now working with companies to keep essential services running.

The challenges faced by the government and regulators are profound, but that does not mean that pre-COVID-19 pledges will simply fall by the wayside. Instead, they are even more important to securing the UK’s economic recovery. At some point in the near future, the government’s focus will shift towards rebuilding lost momentum. Companies should prepare to take the opportunity to shape the energy sector’s future policy environment.

COVID-19 shouldn’t be an excuse for failure by energy companies, says regulator

During a recent Utility Week webinar, Ofgem Chief Executive Jonathan Brearley stated that COVID-19 should not be used by energy companies as an excuse for failure. In particular, Brearley noted the energy sector was too timid in how it supported consumers during the financial crash in 2008, and now is not the time to repeat similar failings. The regulator is going full steam ahead with its plans to decarbonise the economy and will be delivering the new RIIO-ED2 framework as planned, though this will be reassessed if the outlook worsens. Overall, Ofgem is being pragmatic and trusting companies to do the right thing by their customers, and it’s clear they see the road to net-zero as a fundamental step towards securing the UK’s economic recovery.

In the weeks ahead, Ofgem will be reviewing its work programme in light of COVID-19. This is an opportunity for the sector to re-engage with the regulator and demonstrate what support is needed to help businesses impacted by the virus and fulfil the regulator’s plans.

Fresh ideas and a new Chair for the BEIS Committee

Keir Starmer’s appointment of Rachel Reeves as the new Shadow Chancellor of the Duty of Lancaster means the chairmanship of the BEIS Committee is vacant.

As Labour MPs compete for the role, the Committee is inviting comments on issues it should investigate over the course of this Parliament. At such an important time in our country’s history, the Committee will be looking at suggestions beyond the response to COVID-19, which will be covered by a myriad of inquiries. Instead, they will be looking to the sector to offer insights into business areas the UK needs to strengthen if it is to thrive in the new digital, carbon-neutral age.

Energy White Paper will return

We understand that the Energy White Paper, which has already been delayed on several occasions, will be delayed further as a result of the ongoing response to COVID-19.

While this is frustrating, as it will provide crucial insight into the government’s policy direction on the retail market and reaching net-zero, this presents an opportunity to influence and feed into a document which is further away from completion than widely thought. With much of the country confined to their homes, now more than ever the government will be looking to industry for answers. For example, the government’s manifesto included commitments to introduce new measures to lower bills and invest in clean energy solutions to reduce carbon emissions. While detail around these measures is light, the delay to the White Paper is a good opportunity for the industry to shape what activity in these areas should look like. This will be even more important as the government considers the role of the energy sector in the UK’s economic recovery.

So, what does this all mean for the energy sector?

We have a government with a fresh mandate and a new Chief Executive at Ofgem, both of whom will want to make a bold start to their tenures which will go a long way to securing their legacy.

As the country shifts towards its plans for economic recovery in the weeks ahead, the energy industry has an opportunity it never expected – to help the government and regulator overcome the COVID-19 crisis and help achieve their shared goal, which remains unchanged: to achieve net-zero by 2050.

Those companies able to start that forward-looking process, to demonstrate how they can protect consumers and offer solutions to support decarbonisation efforts, stand to benefit a great deal from their ability to shape the policy environment in the months and years ahead.

WA is supporting organisations across a range of sectors in their response to COVID-19 – whether it is engaging with government and regulators or helping to manage their reputation at this critical time. Please get in touch if you would like to learn more about how our experienced consultancy team can help your business.

 

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Covid-19: what will the recovery look like?

Since the Covid-19 crisis hit, the focus has been on crisis response.

Government, businesses, trade associations and charities have all been grappling with an existential threat that would have been unthinkable just a few short weeks ago.

The Government’s response has been swift and significant. Hundreds of billions of pounds have been made available to prop up businesses in the form of grants, loans and tax deferrals.

What does the Recovery look like?

The priority up to now has quite rightly been how we manage the health and economic emergency that Covid-19 has created. But parts of the Government are already pivoting to think about what the recovery could look like, how we can speed it up and what policy levers they need to pull to make it happen.

A lot will depend on the nature of the economic recovery and governments around the world are using every tool in their arsenal to try and prevent a drawn-out recession.

But even more will depend on people.

How will we all respond once restrictions are lifted? How can we be encouraged to start pumping money into businesses who will desperately need it?

Policy Innovation

Policy teams across Whitehall are looking at their programmes and trying to work out which parts are still viable post-Coronavirus; which parts will need to be reworked and which parts put away for another day.

Policy innovation will have to occur almost everywhere.

And the situation with businesses is no different.

The past few weeks at WA Communications have been about helping clients understand the developments, put their cases to government and manage crisis communications.

But already the conversations are starting to shift from disaster response to recovery. We are talking to clients about what work they can do now to maximise their chances for success once the crisis passes.

Structural Reform

But more than that, structural reform questions are already beginning to surface.

After the 2008 crisis the financial sector went through unprecedented scrutiny and regulatory change.

This time the questions will be broader; about our long-term investment in public services, the role of the state; the readiness and structure of the NHS; the nature of employment; and the capabilities of the domestic manufacturing base to name just a few.

Central figures in this government are born reformers and will relish these types of challenge to conventional thinking.

Dominic Cummings may no longer be able to go to war with the BBC or civil service hierarchy, but he may yet find room for his reformist agenda in the response to Covid-19.

Message and positioning are key

Given the unprecedented upheaval the Government is having to manage, making your message stand out is key to being heard.

Measures that drive economic recovery and protect or create jobs will draw the most attention.

But there will also be possibilities to think more creatively about how you can work with government, what policy innovations can fit into the broader narrative of recovery and which sectors can lead the charge.

Despite the pandemic, it’s important to remember this is a government fresh off the back of a resounding election victory and with a huge swathe of first-time Conservative voters to please.

In the midst of a crisis it seems premature to be thinking about a recovery, but the Government is already looking for ideas.

Positive policy ideas that can help support the economy will be listened to.

Organisations that bring solutions will be welcomed.

Using this time to think about what role you could play in the recovery would be time well spent.

 

 

 

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Governing in a Crisis: How the UK Government is adapting to Covid-19

We are living through unprecedented times, but just like all of us, government and parliament are adapting to a new way of working.

New structures within government as MPs head home early

The immediate attention of the Government is understandably and rightly on responding to the national public health and economic emergency that we face.  As the Prime Minister put the country on a war-like footing, camp beds have been dusted off, and families have been told not to expect to see loved ones working on the front-line for days, weeks and possibly months.

But this bunker is far from isolated from the outside world.

It is relying on a network of communications channels, some hastily set-up, to feed those inside with information and intelligence in order to guide their next move.

As a priority, the prime minister created a new ministerial structure framed around four new implementation committees focusing on health, public sector preparedness, the economy and the international response.  Each committee is chaired by the relevant secretary of state and brings together officials and ministers, reporting into Downing Street.

Number 10’s business team and its sector specialists have been tasked with triaging the huge amount of correspondence pouring in from companies up and down the country who are requesting additional clarification, detail and support.

And within the ministerial departments, officials and advisers are having to manage an unprecedented amount inbound communication.  Their job is to identify common themes and to spot worrying outliers, relaying this information up through the chain of command for action.

Outside of Whitehall, it was confirmed today that MPs would leave for their constituencies a week earlier than planned for Easter recess.

This measure follows on the back of the Speaker telling all visitors to stay away from the parliamentary estate, select committee hearings being wound-up with no witnesses to interview, and Westminster Hall debates being pulled for fear of transmission.

New ways of working

Against this backdrop you would be forgiven for thinking that nothing else but coronavirus matters.

It is true that priorities have shifted, and that the coronavirus response is without doubt the single biggest item on the Government’s agenda.  The response, and its aftermath, will preoccupy the duration of this Government, and probably the next.

But it is noticeable that, even now, most meetings already in the diary to take place in person with ministers, parliamentarians and officials on matters outside of coronavirus, are being quickly re-arranged to take place over audio and video conference lines.

Postponed not cancelled.  Moved in the diary not removed from the agenda entirely.

Similarly, all current select committee inquiries have had their deadlines for evidence submissions extended.

While Easter recess could not have come sooner for many MPs, parliament is expected to return – in some way – on April 21st.  Robert Halfon MP, chairman of the education select committee, is pushing with many others for remote working to be enabled.

Central to this will be video conferencing and, potentially, digital votes.  This may not be possible to arrange at full-scale in just a few weeks, but the Commons has already approved temporary use of video conferencing by select committees until June 30th, with the option for the Speaker to extend.

We can expect more information to follow in the coming weeks as 21st century parliamentarians lobby the new speaker to bring parliament up to speed to allow much required parliamentary scrutiny to continue.

Looking ahead

The attention and focus of the Government and parliament will, of course, remain doggedly on coronavirus for the foreseeable future, but we should not forget that this is a Government at the start of its journey not the end.

It is a Government with a manifesto that – while surpassed by recent events – was built on a lot of promises that people will remember, not least the levelling up agenda.

This Government will have a mammoth task in responding to the fast-moving crisis and realising its commitments through tangible outcomes.

In the fog of war it can be hard to see, but this Government is lucky to have a business community standing ready with ideas and solutions to help it in its immediate response and in the delivery of previously made pledges.

 

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Covid-19: how to be heard when everyone wants the Government’s attention

We are in uncharted territory.

Never before has a crisis hit of such magnitude and affected so many in the UK and around the world as the Covid-19 (Coronavirus) pandemic

Whilst the immediate priority must be people’s health, the economic consequences of the pandemic are becoming clearer day by day, and national governments are the only bodies with the financial firepower to help.

The Government is urgently trying to put measures in place to protect businesses, but the situation is evolving rapidly and of a scale few will have dealt with before.

Advisers are Key

Government is being inundated with requests for help.

These requests are being triaged and prioritised by senior officials and advisers in the departments and at No 10. Access to them is vital.

Making sure your message lands is also crucial.

You need to recognise that the person the extraordinary pressure the person you are speaking will be under and offer solutions if possible.

Work with the media

Finally, it is important to recognise that government does not exist in a vacuum.

The Johnson government has been particularly tuned into public perceptions, even live streaming focus groups into Downing Street to get instant reaction to policies.

Your story and the stories of your employees matter. Media opportunities have never been more abundant.

If you have a story to tell, think about how you can work with the media to disseminate your message, whilst being mindful of the gravity of the situation and not appearing to profit from the crisis.

Remember your employees

Public messages will also have the impact of reassuring your employees that you are fighting hard to address the challenges ahead.

Many employees risk feeling isolated and concerned for their future, leading from the front can show them you are up to the challenge.

It’s all about your message

Whilst we are a long way from knowing the true extent or length of the impact of Covid-19, now is the time to taking your case to government.

Whatever form of communications strategy you decide to adopt, your message is vital.

Hone it, test it and say it loud and often.

It may not seem like it right now, but people are listening.

 

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