We would like to extend our gratitude to everyone who attended our latest biz4Biz Connexions Zoom meeting on the 13th August 2020, with particular thanks to our guest speaker, Bim Afolami, MP. We were able to collect over £300 for the NHS who have provided us all with incredible support over the course of the Coronavirus pandemic. biz4Biz Zoom Connexions are a fantastic way to help keep us all connected and able to discuss business and the future of our beloved Hertfordshire while we socially distance to protect those around us and ease the strain on the NHS.
Over the course of the meeting, Bim talked passionately about his plan for the future of Hertfordshire and in particular, his ideas to help SMEs recover from the unexpected but understandable downturn in the economy that has left so many businesses struggling.
The Hitchin and Harpenden MP proposes an equity fund of £15 billion to help SME business recovery, which is currently being considered by Government who understand that they will need to be more radical in order to heal the economy.
Bim said, “there are things that we need to do in the relatively short term to really kick start the economy like allowing investors to use part of ISA funds to put into private companies. This idea of recapitalising private companies by way of the recovery fund – around £15 billion of private and public money – will assist SMEs with their debt, which at the moment is higher as a percentage of its revenue and in absolute terms than it has been since records began.
“What we need is a fund that can take some of that debt and turn it into equity, if you can get more equity into those businesses it will be easier for them to manage their debt pile, at the same time providing an opportunity for the Government to take some of the upside when these companies become successful. This means that the Government would benefit a small amount from putting in rescue capital.”
In addition to this, Bim discussed his wider ideas for Hertfordshire, including an overhaul of the local infrastructure, some of which he believes can be completed quickly. New roads, for example, can be accelerated with the introduction of road pricing, which will attract funding from private investors with the planning then handled by Local Government. This aims to improve connections for the county as moving from place to place, from Hertfordshire to Essex for example, or even within Hertfordshire, often takes much longer than it should due to the poor infrastructure within the county.
Bim Afolami talking to a lively audience on Zoom
Bim said, “I think we should be moving to road pricing, constructing roads, and instructing people to pay a toll to take that road. I think that to get a lot more private investment into road infrastructure, which will be facilitated by road pricing, you need planning reform which is something the government really has been very radical about.
“Fundamentally, we need to give local areas the ability and the incentive to construct necessary infrastructure themselves. I think people are worried about introducing new toll roads, but strategically, when building roads that are at least dual carriageways it’s easier to get private investment if there’s a much quicker and direct payoff to the owner of the road, versus traditional government road with the complicated private investor route. Of course, in the wake of COVID-19, having people in their cars is better than people on buses so more roads is what the UK needs and what the economy needs”
Also discussed were the wider ramifications of working from home over the lockdown period. As offices shut down temporarily across the country and allowed their workers to continue from the safety of their own homes to help prevent the spread of COVID-19, there has been some discussion as to whether this will lead to a general shift in the number of people continuing to work in commercial spaces.
At first glance, particularly to the businesses themselves, there seems little downside in dosing or reducing the size of their offices, therefore reducing overheads, commute time, environmental impact etc ‘I he effects of this could, however, extend even further than the devastating loss of business for commercial landlords, lunch places, dry cleaners, and public transport.
Bim shared an interesting story with the Connexions group foretelling the outsourcing of white-collar jobs:
“A guy who runs a big private equity house said to me ‘Bim’, when I failed to reach accountants and lawyers who work for me from home, I worked out that I could just ring somebody from the Netherlands who was really good and cost half the price. That person was also working remotely, and they were working on a faster Internet connection that made it easier for me to actually work with them than somebody working 20-30 miles away in Britain.
“People need to be careful what they wish for, within white collar jobs people think that working from home is a sort of net gain, because they don’t have to pay for the season ticket for example. Not only are they missing a lot of social aspects and a lot of other things that they need to be in the office for, the real danger is that a lot of jobs could actually move overseas where they speak very good English and are very well educated and they can do it cheaper than they can in the UIC In Hertfordshire a lot of people are well paid for what they do because they’re good at it, but also because you just can’t get anybody to do that job in the southeast of England for less than x thousand pounds.
“What happens if you can get somebody to do that for half the price somewhere else? If everyone is working from home, there is no difference. We’re used to that happening with blue collar work with factories, but actually I think this could start happening with white collar work too. People assume that high salaries are just a way of life, but it is not always going to be like that, so I think we have to be careful about rushing too fast into the working from home.”
Bim Afolami, Member of Parliament for Hitchin and Harpenden, was speaking to biz4Biz members via the Zoom platform as part of a Connexions networking meeting.