Watch the webinar
Today's webinar took the form of a conversation between the CBI’s own Deputy Director-General, Josh Hardie, and two former special advisers to the government: Polly Mackenzie, now the Chief Executive of Demos, and Giles Wilkes, now a Specialist Partner at Flint Global and a Senior Fellow at the Institute for Government. Here are the main subjects they discussed:
- Dealing with non-Covid issues…
- …and with Covid issues
- Big changes…
- …but can they be delivered?
- The importance of geography.
Dealing with non-Covid issues…
Josh began the webinar by observing that, as normality slowly returns, some “old world discussions” are returning too. Among them are Brexit, immigration and Huawei.
On Brexit, he said, “we have more information about borders and, crucially, more information about preparations”. But the guidance for businesses creates a new concern: there are dozens and dozens of pages, and yet they are only about preparing for Britain’s departure from the European Union in the event of a deal. “The amount for No Deal will be so much more.”
As Josh put it, directing his words at the government: “Please get a deal!”
As for immigration, Josh said that, again, “more detail has come through”. But he raised concerns about “the continued approach of valuing people by their wages rather than by their contribution,” and about the burden that the new system might place on small businesses.
He also emphasised the increased need for a “flexible” immigration system. The current setup was devised during a time of full employment; now it will have to exist through a period of mass unemployment – and will have to adapt accordingly.
Then, on Huawei, Josh started by pointing out that it is “for government to decide about national security issues” – but their decision to remove the Chinese company’s parts from the nation’s 5G network could have ramifications for businesses and for others. “If that slows down connectivity, that has real implications for regional growth, for productivity…”
Besides, “It shines a light on some of the geopolitical complexities we face…. Now is the time for the UK to show its global trading values.”
…and with Covid issues
All of these issues – Brexit, immigration, Huawei – would be “very daunting for business,” even if there was nothing else going on, said Josh.
But there is something else going on: Covid-19 and the reopening.
Josh dwelt on the uncertainties that have arisen over facemasks and returning to offices. Masks are going to become “mandatory for [entering] shops – but there’s confusion about where else”. And for returning to offices, “the guidance still says work from home if you can – [but] the public message is moving to ‘go back to work if you can’.”
“If the guidance and the messaging are at odds,” Josh continued, it’s “very difficult” for businesses to have conversations with employees about what they should and shouldn’t be doing. Of course, businesses will use common sense – “but common sense needs to be underpinned by facts”.
Josh suggested that the government’s previously strong grip on the message “feels a bit more fragile now” – and Polly agreed. “There’s been this increasing disintegration of the consistency of the messaging,” she said, “starting when Boris Johnson came back to work”.
She put this down to “human” factors – we are all tiring of lockdown – but also to dysfunctionalities within government. “You can’t eradicate the personality defects of people who get to be senior politicians. It’s just who they are.”
It wasn’t all masks, offices and confusion. Josh highlighted two other areas of focus for the CBI: the potential for more local lockdowns, and the “enabler” that is transport.
Polly talked us through her work on the People’s Commission on Life after Covid-19.
The commission has gathered a range of experts, including Josh, to consider the future of the country. It is also surveying thousands of people about their experiences during lockdown – and what they hope for afterwards. The first full set of results will be published next week.
Some themes are already emerging, however. One “overwhelming theme” is “working from home”, revealed Polly. “There are difficult stories around abuse and isolation… but most people have valued the slower pace, spending more time with their families….”
Indeed, the word “scratch” keeps coming up in the early results – because so many people are citing “cooking from scratch” as a particular joy of the past few months.
Of course, the eagerness to continue working from home “isn’t universal,” explained Polly. Many people either can’t or do not want to. But, “even if 20 per cent [of workers] are using offices less, there are huge implications for public transport, for city centres… [This is] something which is huge and incredibly complicated in its network of effects.”
There are other big questions arising from lockdown, too: “How do you value lower-paid people in the economy? How do you value immigrants? …. It’s become clearer to the public at large that, even if you’re well off, your wellbeing depends on other people who are less well off.” The entire social contract may have to be redrawn.
…but can they be delivered?
Giles brought up one of his abiding concerns: “I’m always worried about the gap between a wonderful vision in a pamphlet or op-end and how you deliver it.”
He cited the example of the huge changes of the post-war years. These changes actually happened, but not without “wrenching actions” – such as “seizing wealth in 1945”. Much like then, big changes now will require big sacrifices somewhere, particularly as the economy and the public finances will be in a less than ideal position.
Besides, continued Giles, there are many competing desires and priorities at the moment. “I’d love a greener recovery,” he said, “but we’re going to see a couple of million [jobs] disappear…. Are we going to be talking about qualitative things? Or are you just going to be worrying about hundreds of thousands of jobs?”
Josh accepted this point, but also thinks it likely that significant advances will be made – not least because businesses want those advances to be made. He pointed out the appetite for real progress around, for example, “quality of work” and “racism”. As he put it, “As long as people are really pushing, we will see steps.”
The importance of geography
Giles also mentioned one of the contradictions of the lockdown. On the one hand, Britain’s devolved political system has made it harder for “central control” to impose itself – and thereby probably contributed to some of the confusion that exists. On the other, “some of the countries that have dealt best with outbreaks have had good local governments that can deal with it where they are.”
Overall, he believes that one of the “most interesting” outcomes of the crisis could be “if [the government] really empowers local politicians to be responsible”. This will not be an easy process. After all, it might involve handing real tax-raising powers to localities – and then accepting that some will go bust and seek help from the Treasury. It would also involve “patchy” outcomes in general – some areas would perform better than others.
Most of all, “it involves letting go”. This, Giles said, would mean “a change of culture… in the political economy”.
He warned again: “It’s so much easier to bring out a pamphlet than to actually see it through.”
Key questions we answered:
- Josh, what is the CBI’s longer-term thinking around transport?
- The CBI has been working with KPMG on a paper looking at the future of commuting, which we are publishing tomorrow.
- Prior to the pandemic, an estimated 1.7 million people in the UK worked from home. Since lockdown, this has increased to around 20 million.
- Unsurprisingly, by late March 2020, government data also showed motor traffic had fallen by 73%. Similarly, rail travel was down 90%, while London tube and bus journeys had fallen 94% and 83% respectively.
- But with parts of the economy now reopening, businesses are facing difficult questions about how to support employees to return to on-site working when public transport capacity is likely to remain restricted for some time.
- Amongst employees, there is also little desire to revert to the same patterns of work and commuting as before the crisis.
- In the longer term, the challenge is not only to adapt to what has happened, but to understand what can be done to build better commutes for staff as they begin to return to the office.
- The CBI/KPMG report lays out a vision for improving the commute to make it greener, more affordable, and more efficient in the years to come and the steps that should be taken by government and business.
- Polly and Giles, what do you think of the government’s communication around masks and returning to work?
- Polly – There has been an increasing disintegration of the consistency of government messaging. Everybody is exhausted by the conditions imposed by the lockdown and want this to be over. I think masks are intrusive, uncomfortable and deny human connection. But of course, we must wear them. In addition, many in government are struggling with the idea that this isn’t over.
- Giles – Dominic Cummings arrived disliking the mechanisms of cabinet government, i.e. the rivalries and politicking. But tensions between different departments on policy is a sign of democracy in action. We have been behind the curve throughout this crisis, and the messaging hasn’t helped at all. Even if the government had a clear message on masks, the public are still not happy going out to spend to the degree that they are in the continent because their fear of the disease is higher.
- Giles and Josh, is government joined-up? There has been a suggestion that it is being influenced by the devolved governments and media pressure when it should be influenced by the science. How should it work during a crisis?
- Giles – The government is not normally joined up. The majority Conservative government and the pandemic ought to have overcome that. This means you should have had a single, joined-up vision coming from SAGE and COBRA. There is clearly a glitch with the devolved administrations. It would help if everyone took the same scientific advice.
- Josh – I was startled how disjointed the government was prior to Covid-19 regarding policy. This was particularly the case when it came to big policy issues such as the industrial strategy and Brexit. Now, Number 10, Health, BEIS and Treasury are actually more joined-up on this situation than they have been in the past. But there is an awful lot more to do.
- Polly, can you tell us a bit about your work on life after Covid-19?
- The phrase ‘build back better’ has emerged. This is an aspiration we can all get behind.
- At Demos, we feel there is a gap between the use of the term ‘better’ and what it means in practice. There has been a lot of confirmation bias expressed in the political sphere following the crisis where each side has claimed that their vision of society was right all along.
- Our work wanted to engage with the public on what they think ‘better’ feels like.
- Overall, our research focused on three areas:
- Day-to-day lives – People want a better work-life balance, access to green spaces and better family lives.
- Working lives and the economy – What does this mean for our transport networks, urban infrastructure, and city-centre economies? There’s also the question of how you value lower-paid people in the economy. Opinions have also changed on immigration.
- The social contract – This is about what we owe to other people. People have seen others suffer or putting themselves on the frontline to care for people. There is a sense that we might owe more to each other now. It is more apparent to the public at large that the wellbeing of the well-off and affluent is more dependent on those lower-paid, somewhat hitherto invisible members of society. I think that will change what people want from the social care system and the NHS.
- Giles, how are you re-thinking the social contract in the UK?
- I see a rupture similar to what we saw in 1945 with the drafting of the Beveridge plan, and 1979 onwards with the rolling back of the state. These are huge changes.
- I genuinely worry about the delivery side of some of the ideas we are discussing. How are we going to deliver on these nice ideas when we have to address the nastier things we will need to do to bring the public finances under control?
- It would be great to have a green recovery, and the coalition government can take a lot of credit for the offshore wind revolution that took place. But that initiative created 20–30,000 jobs. This time, we are going to need measures that create between 2-3 million jobs.
- In a year’s time, when huge unemployment is the reality confronting the government, are we going to be talking about creating hundreds of thousands of jobs? I think that will dominate everything whatever we think.
- Giles, what is your view on what people could expect from the government as we emerge out of this crisis?
- This government needs to look closer to home if it wants to create a system that is more responsive to people’s lives. This doesn’t mean tinkering with departments and their communications teams.
- David Cameron had a go at this with introduction of police commissioners and the localism act, but it was never whole-hearted as it was implemented during the austerity years.
- It could be the most interesting thing they do if they empower local politicians to be more responsible.
- To do that, you need a change in the political culture we have. This is because if a senior Whitehall politician feels that they are going to be blamed for something that goes wrong, they are going to want to be given the chance to give their side of the story, not the local politician.
- We need an agreement between the people and government that power and responsibility will be devolved to local MPs and administrations.
- Josh, what are you hearing on the clarity of transport messages? And on the issue of working from home versus working from the office?
- The guidance still says work from home if you can. Nothing has changed. But at the same time, it feels like what politicians are saying is around the idea of getting back to work if we can.
- This is the difficulty. It feels like the guidance is saying one thing, but the politicians want something different.
- So we are asking decision-makers for clarity on what they really want to happen.
- On transport, we need more travel guidance.
- The capacity on our transport network is going to remain low while social distancing is in place. But that doesn’t mean we will return to the same levels when social distancing ends.