Watch the webinar
After the long and sunny Easter weekend, we wanted to dive straight back into some of the most important questions facing businesses – and we had great panel to help us do that. There was the CBI’s own Deputy Director-General, Josh Hardie; the CEO of the British Retail Consortium, Helen Dickinson; and the Business Engagement Lead in No.10, Katie Lam.
Katie was able to give us the latest from the heart of government, including the news that Boris Johnson is “totally delighted at all the very kind things that people have said” as he continues his recuperation. Here’s what else we discussed:
- What happens after the lockdown?
- The importance of government guidance
- The differences between devolved administrations
- The challenges of supply chains…
- …and of ports.
After the lockdown
As Josh pointed out, it is “right from a health perspective” that the lockdown continues. And we shouldn’t, as both employers and as citizens, get ahead of ourselves. But now that there’s hope that the curve is beginning to flatten, it’s only natural that we should start asking questions about “what happens on the other side”.
Many of those questions are practical: for example, about how and how quickly businesses should reopen once the lockdown is relaxed. But some are more reputational: or, as Josh put it, “how will businesses be remembered?”
The answer to that particular question is, in many cases “very well”. We highlighted several examples of businesses that are doing good throughout the crisis, from Mars working to provide meals to NHS staff to Vodafone’s funding for forms of coronavirus treatment.
But businesses cannot afford to be complacent, of course. Josh listed three areas that demand particular attention: care for employees, using the government’s funds responsibly, and joining the national effort to help combat COVID-19.
When asked how businesses can address the concerns of employees who are still going (or returning) to their workplaces, Katie gave an answer that was, by her own admission, simple – but important. “Direct them to government guidance.”
She explained that, while the government’s original messaging was focused an a very clear directive – “stay at home” – and that this may have led to some misunderstandings, a lot more nuance has been added over time. Last week, the government published a detailed set of general principles for businesses operating in the time of coronavirus, as well as a range of industry-specific guidelines, too.
There are still some areas of confusion, however – among them, the differences in approach being taken by the UK’s devolved administrations. Katie said that the central government is “working very closely” with leaders in Northern Ireland, Scotland and Wales, but that differences have still been unavoidable. She added that the key challenge is communication: “disseminating that information [to businesses], where decisions are devolved”.
Josh emphasised the importance of the “public tone” adopted by devolved administrations. “A few weeks ago, some in Northern Ireland were being aggressive towards business,” he said, “but we sat down with them and explained the good work that’s being done by many businesses, and that’s turned things around.”
When it came to supply chains and the retail sector, Helen told a story of two halves. In the food sector, where the problems of a few weeks ago have largely been overcome, “it has shown we have some real resilience built into our supply chains”.
But other retail sectors are facing – and will continue to face – great challenges, not least because various links in the supply chain may currently be out of action. “Lots of retailers in clothing,” Helen said, “are now having to cancel orders, or make sure that orders aren’t blocking up the ports and taking space that’s needed for food supplies.”
In fact, ports became one of the themes of the conversation. One of our audience members raised the problem of having to pay to hold stock in ports because they can’t currently find anyone to pick it up.
Helen proposed one possible solution: businesses collaborating with each other to see whether they can “move things together”. And Katie suggested that there might be government action to follow: “The issue of stock piling up in ports is definitely a problem – it doesn’t have an obvious solution, but it’s definitely something we’re looking at.”
Key questions we answered:
- What is the CBI hearing from businesses?
- Ongoing cash flow concerns:
- Access to finance has been recurring theme in these webinars – the message from firms is that cash remains king, both in the here and now as they process payments ahead of month end. But also, as they look beyond the immediate term.
- With firms beginning to process payroll/settle other liabilities ahead of month end, the CBI’s receiving increasing concerns from businesses regarding cashflow.
- In the absence of vital finance coming online via JRS and other funding steams, businesses are concerned they’ll become insolvent irrespective of Government support.
- The CBI is doing some immediate thinking about how best to support firms – ideas going into HMT – possible options include:
- Using the Business Rates system
- Using the insurance industry as a conduit to issue Government grant funding
- Using the tax system to deliver liquidity.
- Looking beyond the immediate term, several businesses have identified the summer months (August/September) where they’ll have to decide on their future.
- Guidance from government about what support provisions will be made available beyond the immediate 3-month commitments already announced would represent a massive shot in the arm for firms.
- Supply chain pressures:
- Firms are continuing to report strains and pressures on supply chains, including on essential goods.
- Spare storage capacity is in increasingly finite as supply chain pressures continue to worsen.
- This has led to slower onward transportation of goods from warehouses to customers — result of falling sales in many sectors and limited capacity in the logistics industry is reducing available space.
- At the same time, new orders are continuing to arrive, particularly from China, meaning this issue is likely to deteriorate over the coming period.
- Left unaddressed, firms are concerned about the prospect of mass accumulation of goods at UK ports, blocking the free flow of essentials to the economy, and triggering another wave of panic buying.
- We know that one of the toughest decisions for businesses during this crisis has been that question of whether they should remain open or not. And if they do, how they do so safely. What are the latest developments on this for firms across the UK?
- Throughout this crisis, the priority for employers — whether they have been able to stay open or have had to shut their doors temporarily — has been to protect their employees’ health and keep their organisations going.
- Last Wednesday, the UK Government published valuable updates to their guidance for employees, employers and businesses on social distancing in the workplace and how businesses in England can stay open through implementing a range of practices that will ensure the health and safety of their workplaces.
- In particular, through our engagement with Katie, both the CBI and Trade Associations have asked for sector-specific guidance – where possible.
- And the Government has responded, with the latest updates setting out a range of sector-specific scenarios.
- Crucially, the measures will help reassure employees that — when they go to work — their health is protected; and they won’t be risking the health of the rest of their family at home.
- More widely, we are continuing to see a lack of consistency in approaches across the Devolved Nations.
- Public health, of course, is a devolved issue. And this is an incredibly complex area, with no one right approach to take. Every Devolved Administration has the right to interpret and respond to this challenge as they see fit.
- But what we are seeing is that this inconsistency in rules and guidance across the UK, is feeding in to one of the biggest challenges that businesses are facing right now in response to this issue.
- And that’s actually from public opinion and campaigning pressures for businesses to close, even though they’re adhering to guidelines.
- The reality is that every job maintained now is a livelihood protected for the recovery in the future.
- Businesses are doing their best, and together we need to ensure that when organisations are called out, the criticism is legitimate rather than based on a misunderstanding of the rules.
- And that extends right up to recovery, when consistency in approach across the UK will matter even more to help us build public support, inform the national conversation about the restart and get our economy going again.
- Can you talk us through the thinking and purpose behind the Government’s latest guidance on whether businesses should remain open or closed?
- If you are encouraging people to stay at home and lose the liberty they would like, you must a simple and direct message to persuade people.
- The government was clear on those who need to remain at work – i.e. if you cannot work from home then you can go to work. Due to the need for simplicity and clarity on the message, some of the nuance on which employees need to go to work was lost.
- Last week, the government published additional general advice for all businesses including how they can follow Public Health England (PHE) guidelines. The advice also includes advice on mitigation strategies businesses can adopt if they cannot follow the guidelines.
- For sectors where we received high volumes of requests, i.e. retail, construction, delivery and takeaway, fishing etc. PHE and BEIS wrote sector specific guidance to ensure that employers feel comfortable that they are complying and not placing their staff in unnecessary risk.
- My staff are becoming really concerned about their safety and welfare at work. While we have done a lot to implement social distancing, with the lack of PPE it is difficult to give them confidence. What would you advise?
- My advice depends on the industry the query comes from.
- However, the first thing you could do is to encourage your employees to access the government’s guidance online.
- You can reassure your employees about where your company has enacted social distancing policies. You can implement measures such as staff cohorting where you place the same people on the same shifts. This way, you can contain any sudden outbreak of the coronavirus among your staff. You can invest in more handwashing or hand sanitizer provision. You can mark out two metres on break areas of the office to encourage social distancing. Having people not face one another is also helpful. Government has also produced leaflets and posters for employers to stick up.
- How are the BRC’s members – who are still operating - implementing social distancing measures? What challenges remain?
- Regarding food retail we saw unprecedented levels of demand as people went to buy stocks of food. How you implement social distancing became a priority for the food industry in a very short period of time.
- Two critical areas we focused on was implemented the 2 metre distancing rule, and trying to get Perspex screens for staff.
- The clarity of the government’s message around staying at home did cause confusion in other bits of retail. The food industry needed to be open but regarding online retail, employees were unsure whether to continue working or whether to adhere to government advice, which was to stay at home.
- Across warehouses we saw companies quickly implementing staggered shifts and only allowing a certain number in the canteen to take breaks.
- The BRC developed their own guidance based on best practice they were hearing from companies. Worked with PHE in sharing the best practice with them.
- The Business Secretary, Alok Sharma, wrote a letter last week to all employees across the retail industry and those in online and warehousing and distribution, recognising the contribution they are making to the public good and the work their employers are doing to ensure they protect their staff.
- Where letters are provided, supported by a Cabinet secretary, makes a real difference. It provides confidence to employers.
- Will there be a role for business in getting people back to work? Is it possible that employees will need a test certificate to return to work?
- Currently the government are considering their options, and nothing has been ruled out.
- If it looks scientifically viable and implementable, we may consider issuing safety certificates.
- There could be a role for business in getting the government message out to their employees.
- How closely are you working with your counterparts in the devolved nations to ensure consistency is applied?
- We could be working very closely and apply different policies. Such is the nature of devolved governments.
- We are working very closely together with Scotland, Northern Ireland and Wales. Their Ministers all sit on the UK government’s groups.
- Even though our guidance published last week is just for England, we sent it round the devolved nations to ensure they had sight ahead of its publication.
- Working together is not the same as taking the same approach. There are examples where the devolved administration and the UK government have taken different approaches.
- The only thing we can do is be as clear as possible is on where those differences are.
- We appreciate this can create confusion on the ground with people looking up ‘UK government coronavirus advice’ on Google and finding PHE advice even though they are based in Scotland, for example.
- The initial challenge was the public tone that some political leaders across the devolved nations were taking, which at times, was hostile towards business. But the CBI sat with these leaders, and the trade unions, to make them better understand the challenges firms are facing during this period. We have since seen a step change in the tone of political leaders across the devolved nations. It has made a difference.
- How have your members overcome supply chain challenges? What challenges remain?
- The food industry has dealt with demand that it would have never anticipated prior to the crisis.
- A huge amount of work has been undertaken to overcome these challenges. Working with government to change laws and regulations to ensure the food industry can cope.
- Suspension of certain parts of competition law to enable retailers to talk to each other.
- Relaxation of delivery curfews to enable trucks to deliver during the evening.
- Supply chains are back up and running in terms of covering the areas where the shortages were.
- So, the food industry has strong resilience built into its supply chains to meet the spike in demand.
- Across the rest of retail, lots of retailers in clothing are needing to cancel orders they have made and having to ensure orders are not blocked at the ports.
- Businesses are trying to make these a collaborative effort with their supply chain to smoothen this process.
- The financing of the Job Retention Scheme and that money coming into businesses over the coming weeks is going to be crucial for these companies.
- My company imports a large percentage of stock from China and the far east. We don’t have anybody who can collect these deliveries from the ports. Is there anything they can do to mitigate this?
- More businesses are talking to each other to find ways to move things together. Something they would not have done before.
- For businesses having to store stock or continue to freight goods into the country, we are seeing some of the freight and storage charges rising. Businesses do not have an alternative, so demand has risen. This means we are seeing some companies profiteering out of these charges.
- Businesses shouldn’t take advantage of those situations and price their storage fairly to try to help firms.
- What’s the Government’s perspective on how businesses are managing disruption to their supply chains?
- The Department for International Trade can help businesses with customs issues.
- On the issue of stockpiling, this is a problem that the government are working on. We don’t have an immediate solution to it.