Director General's Blog


What can businesses expect now

12 May 2021

By Stephen Haddrill, Director General


The last week has seen the Government consolidate its position as a result of the biggest ever set of polls, whilst the Opposition has fallen into internal strife.

A year ago, as the Government struggled to get a grip on the pandemic, many would have been reluctant to predict this outcome.  So where did it all go right, and what can business expect now.

Despite the controversies that swirl around it and the accusations of mistakes, the Government has exceeded expectations through the pandemic by acting swiftly and with foresight to secure the vaccine, and showing flexibility and a willingness to ditch long-held beliefs by pouring money into the economy.  It has also set a new standard of communication and transparency by speaking directly to the public on a daily basis.

The electorate rewarded these actions, but the Government’s resounding success at the polls has also been helped by an ongoing identity crisis in the Opposition, which struggled to agree how to enthuse voters in its traditional heartland. All is not lost, however, as demonstrated in some local authorities where the mayor has shown leadership - Manchester being the stand-out example. But the task of regaining so much lost ground will be a challenge, not least because the heartland is no longer the same as it was and is less in tune with some things that Labour has traditionally espoused, such as support for immigration and internationalism.

This is a worry, because it takes a strong, decisive and vocal opposition to keep a strong, decisive and vocal government on its toes.

Having shown what it can do during a crisis, the challenge for the Government is to keep doing it as the Covid threat recedes. It poured money into the economy and health, but will it now convince the public that fiscal constraint is needed. Will a war-cabinet style of government that facilitated quick decisions and support for innovation give way as checks and balances get reasserted in Whitehall? And will openness and direct communication survive in a post pandemic world in which there is less common ground and more to fight over.  Much may revert to normal, but I suspect that for a while at least the pace of change will not go backwards.  Ministers, always inclined to be frustrated by the speed of Whitehall and having tasted what can be done, will want to push forward their programmes faster than before.

That should be good news for business, which needs clarity, consistency and effective delivery of policy. It probably means the government will be cautious about reducing support for the economy – bad news for the fiscal hardliners, but not necessarily a bad thing for business.

This week the FLA has reported a return to growth in the lending markets, with more businesses looking to invest. GDP figures are looking stronger and our members are playing a part in driving that. Thankfully, the clouds are parting.  Let us hope that the can-do spirit pervading government survives to seize the moment.

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