There suddenly appears to be a new found wealth that is driving this desire for closer proximity to the electorate. Whilst billions of pounds have been set aside to support the Covid pandemic and facilitate growth post pandemic, we appear to have found a new confidence in our ability to fund activities despite the level of debt shouldered by most G7 countries. Has our Government gone “Crypto” is the Britcoin a reality to follow the unfettered Bitcoin? Whilst I applaud the support for many businesses provided by Government during Covid, is there a plan at any time afterwards to balance the books?

Will we be faced with redundancies or resignations following the removal of furlough? We are riding high on state aid for our homesteads, but once the guaranteed income is removed will businesses reach that make or break tipping point and reduce their staff levels or will they equally be faced with a deluge of resignations in a restricted labour market? It is my belief that we are facing a false dawn. Remove the enforced Covid arrangements and the new normal will be business as usual. The Hospitality sector in particular has been the first casualty resulting from the labour shortage created by Covid where many overseas workers have returned to the safety of their families in their native countries to see out the pandemic. Returning to the UK has been made much more difficult following immigration rules introduced in the meantime created by Brexit. This has skewed our thinking around unemployment in particular and will stimulate wage increases at this end of the employment market.

Rising house prices resulting from a greater appreciation of the countryside and the need for social distancing, home working offices and a garden, will place greater pressures on many other employers to increase wages. The more than a million empty homes in England and the more than one million homes with planning permission yet to be developed, might become the new wasteland of oversupply, once the impact of higher wages finds its way to consumer pricing, driving up inflation.

Those with the requisite skills will benefit from this “brave new world” ahead and really should take the opportunity to take the offer from the highest bidder to support their families new way of life. Indeed many may love the option of continued home working and others may desire a return to the old ways which may also be the arbiter of change for the future. The people will decide what is right for them and the companies likewise. Decisions around redundancies have been clearly delayed by the furlough scheme, but soon these decisions must be made as we near the opportunity for the resumption of normal service by business and the various safety nets are removed.

And at the point where obfuscation becomes the order of the day, is this the moment when devolution makes more sense again? Will we see a return of decision making back to the regions once the money supply tightens and pleading poverty becomes the new order of the day? The Government will likely have little choice. We are very likely to see rising inflation, higher levels of unemployment a spate of Company closures and a continuance of some Covid measures as public sympathy for Government turns to enmity. We will require structured tendering from Regions once more as the political blame game starts again and Government hastens its departure from their previous decisions.

Business as usual following the release of pent up demand will return with vengeance and it will fall to businesses across the land to foot the eventual bill for the necessary profligacy that the pandemic has incurred. It’s time to create the action plan wherever you sit in all of this and make the right play in what will be a new way of operating for us all.

#TheBigShift @biz4Biz @weldingworld

Adrian Hawkins, Chairman of biz4Biz, said “We are in uncharted territory. I have been involved with my own SME companies for 40 years and whilst I experienced many recessions, I have never seen anything like the situation created by this pandemic. In recent times and owing to my involvement with biz4Biz, the Herts LEP and the Herts Growth Hub as a result, I have been instrumental in assisting SMEs find advice and financial support wherever possible. No one can conceive just how painful the pandemic has been for SMEs”.

‘Unlocking Britain’ the plan for SME business recovery

Is there a likelihood for matters to be far more painful in the future? We hope not! Most SMEs are driven by a desire to do things in their own way in their style and because this is an individualist trait, we must consider supporting their enthusiasm for the challenges that lay ahead created by this “State inflicted Debt burden” a necessary cost to keeping their staff safe.

We need to raise their spirits and demonstrate how to rebuild a business that has suffered such surreal devastation from the lockdown. The last thing any SME will need in the future is a demand to repay a debt secured on the business to help them get through this pandemic. The scheme promoted by Bim Afolami MP is masterful and forward thinking in “Unlocking Britain” in the most appropriate way.

The equity for debt proposal could also “Reignite SME Growth and Competitiveness”, a national scheme supported by the University of Hertfordshire, the LEP Network, Action Coach, the Herts LEP and biz4Biz alongside many others to help deliver first aid to businesses and ensure that SMEs focus on the strengths of their business and increase their efficiency, productivity and profitability. With a smaller amount of Government funding to assist this proven support mechanism, it is hoped that SMEs will leave this pandemic stronger than they entered.

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.