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.
03 Mar 2021
The FLA has called for support for business to be maintained through the crisis and for the restoration of public finances to be phased in gradually.
24 Feb 2021
This is one of the hardest budgets to predict of recent times because the range of possible economic scenarios for the rest of the year is itself so wide. And, unlike some of his predecessors, the Chancellor has floated nothing of significance. But the ink must be nearly dry. Today, the OBR will start its work on assessing the soundness of the proposals. The rest of us have another week to wait.
05 Jan 2021
As we embark on a new year, much of the news about Covid 19 and the economy is bleak - infections are rising and economic growth has stalled. However, our situation could have been so much worse without two things: the gift of the vaccine; and the agreement of the trade deal. They give us all the chance for cautious optimism that the recovery will start properly in the year ahead. But whether that turns into real future prosperity depends on the decisions taken by Government and businesses in the next few months. So what should we now expect from the Government in 2021?
08 Oct 2020
Earlier this week the Treasury announced revisions to the legislation which prescribes how default notices issued by lenders should be written. This is a step forward. For too long, the law has required lenders to use language that is threatening in tone and does not reflect the mutually respectful relationship that lenders seek with borrowers.
It might seem churlish therefore to complain, but the truth is that the announcement has only scratched the surface of what needs to be done to reform consumer credit legislation.
17 Sep 2020
The Chancellor is working on the shape of his Comprehensive Spending Review and Budget to determine what the Government can afford to spend and how spending should be allocated at a time of the greatest uncertainty. The pandemic is placing huge pressures on him to keep the taps open to maintain economic recovery. At the same time, his ability to raise taxes to pay for this largesse is severely constrained for the same reasons. There will be a gap in the country’s finances, and it may have to be met by borrowing. Fortunately, interest rates are low, and the Government remains credit worthy. It can afford to ease the pain of business and individuals through the winter.
21 Aug 2020
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...
20 Jul 2020
We stand at a fork in the Covid road. In one direction the virus fades away, business opens further and economic recovery gathers real momentum. In the other, we bounce from lockdown to lockdown, with millions losing their livelihoods and the economy remaining in the doldrums for years.
01 Jul 2020
Hardly a year goes by without the role of regulation in the economy being reconsidered.
04 Jun 2020
We are great spenders. Consumption is the lifeblood of the British economy.
20 May 2020
The Coronavirus crisis is often described as unprecedented, but the effects on people of an abrupt change in circumstances, such as loss of income, are all too familiar – uncertainty, anxiety, and the fear of being overwhelmed.
27 Mar 2020
In numerous conversations with Government, we have been very clear that the tools used to support the banking sector in 2008 are too narrowly focused to support firms of all sizes, in every sector of business, across the whole of the UK economy in 2020.
11 Mar 2020
The Chancellor has delivered a budget for business, whilst extending a helping hand to people threatened by Coronavirus.
06 Mar 2020
International Women’s Day, which falls this weekend, is a great moment to stand back and reflect on whether we are doing enough on diversity and inclusion.
17 Feb 2020
The pace of technological innovation can at times seems daunting, but technology is simply a means to an end, not an end in itself.
06 Feb 2020
The Government’s decision to bring forward the ban on selling new petrol, diesel and hybrid cars from 2040 to 2035 will require the concerted efforts of politicians, regulators, manufacturers, lenders, utilities and planners to make it achievable.
22 Jan 2020
Lending to small and medium businesses has been falling for some time, especially outside the South East. It has been suggested that this shows SMEs are cash rich but unwilling to invest. There is some truth in both statements. But there is also a ray of hope if we look beyond the use of conventional borrowing and overdraft facilities.
16 Jan 2020
During his time as Governor of the Bank of England, Mark Carney has been a leading voice in encouraging policymakers, business and investors to recognise the key role of markets, financial and otherwise, in tackling climate change.
13 Dec 2019
After the turbulence of recent months, we now have a Government with a mandate to govern for a full term – and the numbers to get business through the House of Commons.
That list of business is very long, and of course begins with negotiating a rather tricky post-Brexit trade deal, not to mention a brewing storm about the unity of the UK. As strong as the SNP are in Scotland, their influence in Westminster has been blown away by the size of the Conservative majority. And what about unity more generally? Some basis for co-existence between leavers and remainers needs to be found.
So, what are the implications of the General Election results for the financial services sector and FLA members in particular?