Lord Bilimoria
Main Page: Lord Bilimoria (Crossbench - Life peer)Covid-19: Economic Recovery
Lord Bilimoria Excerpts
Lord Bilimoria (CB) [V]
My Lords, the world’s most defining crises come out of the blue, unpredicted, and when they happen their outcomes are also uncertain. This global pandemic came out of the blue last year. It has been a supply shock, a demand shock, a health crisis and an economic crisis, with a domino effect reverberating around the world.
The challenge for government has been enormous from day one, and right up front I give credit to the Government, including Chancellor Rishi Sunak and his team, for acting with speed from March last year to try to help save businesses and jobs against the backdrop of enormous uncertainty and ambiguity and a virus we have been learning about every day. There have been ground-breaking initiatives such as the furlough scheme, protecting well over 10 million jobs, and more than £400 billion in support, which in absolute or per capita terms is one of the highest levels of support given by any Government to their economy, businesses and citizens.
Furthermore, the Government have continually listened to business and organisations such as the CBI, of which I am proud to be president, by being flexible and extending schemes when required. For example, the job retention scheme was due to end in May 2020 and has been extended periodically; it has now been extended by the Chancellor until September.
The VAT reduction from 20% to 5% has been extended; this will help hospitality businesses in particular. Hospitality and tourism employ 4 million people. This industry has been decimated by the pandemic. I know from my own business, Cobra Beer, which supplies 7,000 restaurants, how much the sector has suffered. What use is a VAT cut if your business is not open? It is absolutely right for the Government to extend this as the economy opens up, so that businesses and consumers can avail themselves of this measure when businesses are actually open. The Government have also extended the business rates holiday for hospitality, leisure and tourism.
There is also loss carry-back on corporation tax to help firms manage exceptional losses, and government-guaranteed loans have helped millions of businesses and jobs. Full credit goes to the British Business Bank. To think that before the pandemic the British Business Bank had a loan book of £8 billion. To date, as the Minister said, it has lent over £75 billion to 1.63 million businesses, including the 100% guaranteed bounce-back loans. In fact, government-guaranteed loan support has covered businesses of all sizes, from small businesses to multinationals getting support directly from the Bank of England. There has also been the £10 billion insurance, the trade credit guarantee. The Kickstart Scheme is excellent, but will the Government consider extending it by six months after December 2021 to give businesses a chance to benefit from it?
As a result of all these measures the Government have taken, unemployment—which was at 3.5% before the pandemic, one of the lowest levels since the 1970s—is today at only 5.1%. To put this in perspective, after the financial crisis of 2008-09, unemployment went up to nearly 10%. All these measures the Government have taken have saved jobs and businesses so that, when the recovery starts this summer, it will be able to unleash the “coiled spring” that Andy Haldane, the chief economist of the Bank of England, spoke of.
The Government need to encourage investment and the super-deduction is a super initiative, but the prospect of corporation tax rising to 25% in two years is a concern, as nothing should jeopardise the UK being a magnet for inward investment—consistently the second or third-largest recipient of inward investment in the world. Investment is needed so that we can continue to invest in R&D and innovation, currently at 1.7% of GDP. It needs to go up to the level of Germany and America, 2.8% of GDP. Just imagine that extra 1%, that extra £20 billion. That would power our productivity and power our economy forward.
One of the key messages of the pandemic has been the power of collaboration—businesses, universities and government working together, including globally. There is no better example of this than the Prime Minister creating the Vaccine Taskforce and appointing Kate Bingham from the private sector on 18 May last year. Hats off to her and her team on procuring 400 million doses of six different vaccines, with the first vaccination taking place less than seven months later on 8 December—V-day. That was through Oxford and AstraZeneca, a British-Swedish firm headquartered in Cambridge, collaborating with the Serum Institute of India and the Poonawalla family, the largest vaccine manufacturers in the world, with a 1 billion dose contract for the Oxford/AstraZeneca vaccine. That is global Britain in action, and today we have one of the most successful vaccination programmes in the world. Hats off to our Vaccines Minister, Nadhim Zahawi, for 33 million first doses and 10 million second doses already having been delivered in four and a half months.
The Prime Minister’s road map has offered hope. Schools reopened on 8 March, with little discernible rise in cases. However, the hospitality industry still has to wait until 17 May for inside drinking and dining—this after the industry has put so much time and effort into making premises Covid-safe. Where is the evidence of Covid spreading in Covid-secure hospitality venues? They need to open as soon as possible.
Could the Minister also confirm that the reopening of the economy is being driven by data, not dates? If the sad deaths and hospital admissions go down to zero, which has already started to happen in certain parts of the country, the economy can open up quicker, including hospitality. Could the Government confirm that?
From last summer I have been calling for the national rollout of rapid, affordable mass lateral flow testing. I am grateful that the Government finally listened and in November started to implement it.
The Deputy Chairman of Committees (Baroness Barker) (LD)
My Lords, the voting period has now elapsed, and we are ready to resume. I invite the noble Lord, Lord Bilimoria, to continue his speech.
Lord Bilimoria (CB) [V]
Today, not only do all businesses, of all sizes, have access to these tests but every citizen of the country can get them free, so people can test themselves regularly. It has been shown that testing two or three times a week picks up asymptomatic infectious cases. The cost benefit of this in keeping on top of the virus, in conjunction with vaccinations, is overwhelming.
Another aspect that not many people talk about is this: could the Government put the same focus, energy and investment as they did into the vaccination programme into turbo-charging, at speed, the research and trials for authorising repurposed therapeutics and drugs? Dexamethasone was the first, but there are quite a few others, including ivermectin, which could possibly cure over 80% of Covid cases. Such drugs, if proven, would literally be game-changers against this wretched virus.
With Britain ahead of the game in vaccinations and mass testing, we need to come up with a practical, affordable and risk-minimising travel protocol that allows both business and tourist travel, both ways, as soon as possible, using lateral flow tests as much as possible. The aviation and travel and tourism sectors have been destroyed by the pandemic; they need all the help that they can get to recover.
In the opening up, there also needs to be clarity on working from home, which, of course, is linked to public transport, the wearing of masks and the eventual elimination of social distancing. We need clarity on all these measures—can the Minister give us some, including on how Covid status certificates could operate in practice? Research that we have done at the CBI shows that businesses believe that Covid certification should be voluntary, science-led and time-limited, based on proof of either vaccination or a negative coronavirus result, simple to use and consistent across all four nations of the UK—do the Government agree?
Finally, as chancellor of the University of Birmingham, I have seen first-hand the efforts that universities have made to be Covid-secure, including the implementation of testing. Schools have been open since 8 March, but universities will not be able to open up until 17 May. Young people have lost out on so much during this pandemic as it is: university students have missed out on being on campus and on face-to-face teaching, and now, in the final term of the year—for many students, the final term of their university degree—they are being prevented from returning to the classroom. The vice-chancellor of the University of Portsmouth described the move to open up on 17 May as nonsensical and “unfathomable”, saying:
“That this date is after many universities will have finished their teaching year shows a Government with a cavalier disregard for details. This isn’t good enough … Students can now buy a book on British history in Waterstones and discuss it with a tattoo artist while they have their body decorated, but they cannot do the same thing in a COVID-secure environment with their university lecturer.”
The vice-chancellor of the University of York described the timing as “very late” and “disrespectful”. The president of UUK described it as “illogical”. The chief executive of the Russell group said:
“The Government’s announcement … means that … one million university students will be unable to resume in-person teaching until at least mid-May ... the Government’s decision … is a major blow. It fails to take into account the data which shows the safety of teaching spaces, and the very low infection rates at universities right now, despite the majority of students being on campus. We urge the Government to reconsider its decision to ensure these students are not forgotten and can resume in-person teaching as soon as possible.”
The response from the Government, including to universities and business, is:
“The movement of students across the country poses a risk for the transmission of the virus.”
Where is the sense in that? First, universities are offering regular testing when students arrive on campus. Secondly, the majority of students stay in digs, in their own private accommodation, near the university. There is nothing that the Government or universities can do to stop them returning to their homes. In fact, thousands of students have already done this. The move to open universities on 17 May is unfair, unjust, illogical and irrational for students, universities and our economy. Our students should be allowed to go back to university tomorrow, 21 April—not 17 May.
Earlier in my speech, I gave the Government credit for listening to business throughout the pandemic and for collaborating with organisations such as the CBI. We are very grateful for that. These are not U-turns; this is not flip-flopping, but a listening Government. Long may this wonderful spirit of collaboration continue.
The Deputy Chairman of Committees (Baroness Barker) (LD)
The noble Baroness, Lady Browning, and the noble Lord, Lord Bourne of Aberystwyth, are not taking part in today’s proceedings, so I call the noble Lord, Lord Carrington of Fulham.