Over the last 10 days, I have spoken to dozens of CEOs, from major law firms to construction companies. What is clear is that most are generally pleased with the Government’s response package to the economic impacts of COVID-19 so far. The most recent support delivering urgent financial assistance to self-employed workers adds another layer of protection for the majority of the workforce, but further fine-tuning is still needed. It is critical that we avoid people, businesses and indeed whole sectors falling through the gaps.
These initial – welcome – steps must be supplemented by more systemic interventions to stabilise the economy, supporting the whole supply chain, and so the whole economy, rather than only targeting the worst affected. The Government must now ensure that our critical infrastructure providers – e.g. London’s airports – are able to weather this crisis and emerge in a fit state to help meet this country’s trade ambitions when restrictions are lifted. They are currently operating at around 10% of their usual capacity, and while it is unlikely that customers are going to rush back onto airplanes immediately once the crisis abates, the infrastructure that supports our global economy must be safeguarded.
The Government must also ensure that action benefits the whole eco-system as, otherwise, action which appears logical for one business (rent holidays or dividend deferral) can simply cause problems for other businesses or individuals elsewhere in the supply chain. The Government must bear in mind the full picture and must also be responsive as things change. Perhaps the area this is most borne out is the designation of key workers, as it will be vital to reflect on the definition and the need for change as we begin to ‘unlock’.
Other sectors urgently need clearer guidance, perhaps none more so that construction. A consensus is emerging that now is the time to halt the majority of construction work. We realise that this will take some time to do – some tasks cannot be stopped halfway through, sites need to made safe for long periods of inactivity etc. – but in most cases, this can be done quite quickly and should start immediately. The exception is sites where it is crystal clear the government’s guidelines can be met and the work is of national importance. And also critical maintenance, which must continue over the coming weeks, keeping our critical infrastructure, whether the NHS, our transport networks or other utilities fully functioning. As this shift is made, it is vital plan alongside it for a restart as soon as it is safe to do so. Given how important construction will be for our economic recovery, the Government needs to work with the industry to ensure that we maintain the sector’s capacity through the hiatus.
My conversations over the last week have also reinforced the need to protect the entirety of the supply chain to safeguard the economy and champion a rapid recovery. Small businesses are in desperate need of more support and many are reluctant to take on debt that could constrain them in the future. There are also outstanding questions about how and when mid-cap businesses – those too large to take advantage of the government’s small business scheme and too small to look at the Bank of England’s bond scheme – will receive support.
As the Government continues to refine its response, London First and its members have shown their willingness to help. There has been no shortage of offers of assistance from business, from the extremely touching to the ground-breaking, and London First is proud to represent such a generous cohort. We recently highlighted how ExCeL transformed to create NHS Nightingale, and other sectors are leading the way too, such as the work that UCL and Imperial are doing on breathing aids and tests. However, for businesses to be able to continue effectively responding to the crisis, it needs government to make clear where the need is greatest and in what ways we can best help.
Of course, eventually, there will need to be a focus on London’s recovery. The Government will soon need to demonstrate it has a plan for economic growth, at scale, once the crisis abates. It will become important to publish the long-awaited National Infrastructure Strategy, for example, which will unlock private sector investment and boost growth at all levels of the supply chain, at a time when businesses will need that confidence to invest.
London First will continue to engage with members, local and national governments. Seeing the response from both the private and public sectors has been inspiring, but we also need to look towards a strategy for recovery in the long term. The feedback our members provide helps shape our conversations with Number 10, the Mayor, his Strategic Coordinating Group meetings, other political stakeholders and with the Bank of England. London has always been resilient in the face of challenges. Now, by working together to tackle this current crisis, we will see the capital we love bounce back.
