September is too early to turn off the tap. The CBILS and other guarantee schemes must be extended for business to keep them afloat.

Now more than ever Government needs to avoid becoming trapped in the here and now.  It must show anticipation and vision. That is not at all easy given the need to tackle so many short term problems against a backdrop of uncertainty about what the next months will bring. So it’s good that major long term priorities such as net zero, raising productivity and levelling up across the country are still being addressed. These are goals that the FLA wholly supports and we look forward to the coming spending review  showing  vision in taking them forward.

Of course, success in addressing long term goals does depend on escaping from the immediate challenges.  Unemployment is rising rapidly. So are debt levels for many.  The big Brexit questions about tariffs remain unanswered and overhang confidence.  For all these reasons and many others the FLA has pressed the Government to extend its assistance to businesses and their employees through the Autumn and into the new year. September is too early to turn off the tap. The CBILS and other guarantee schemes must be extended for business to keep them afloat.  At the same time, alternatives to payment holidays, such as more extensive welfare payments, must be found for citizens in trouble. Lenders have been and will continue to be ready to support customers in difficult circumstances but accumulating unaffordable debt is not the answer for borrowers.
In looking beyond these challenges to the longer term, Government must take advantage of the change in thinking that has already happened in the pandemic.  When I talk to FLA members it is clear that they think the “office” has changed for good.  A good proportion of business will be done from home: it’s cheaper for the employee and the business and wastes less time. The switch to shopping on line is also here to stay.   Commercial and retail landscapes will change.  Build, build, build must be about investment in broadband and innovative technology.  It must be about changing the planning system to speed up change of use, so that we have houses and new types of business where offices and shops are now,  not new wastelands. It must be about helping business and individuals adapt to a green, low carbon-consuming environment.
All this can be done.  We have a market economy that, if allowed to work, can regenerate growth through innovation and investment. The UK has lenders willing and able to back new technology, hard and soft, and investors able to envision and create new forms of built environment.  We have consumers who have a global reputation for being early adopters, both of products and payment services. We  need Government to guide us through the next year so that our capacity for investment and taking risk emerges intact; whilst inspiring sustainable change; and ensuring that those who could fall by the wayside are helped on the way.
The FLA has already published its views on the road to recovery and will develop its thinking in more detail in its submission on the Comprehensive Spending Review (CSR) shortly.

Published 21 Aug 2020

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