Government must act to restore confidence

The Government must move quickly to restore confidence amid the rapid spread of Omicron, the CBI has said in new proposals for businesses and governments aimed at living with the virus and its variants.

As Omicron’s unmistakeable impact on businesses’ confidence and consumer demand continues – especially in city centres – the business group identifies a series of actions to be taken immediately and in future to ensure the UK is well-equipped to deal with variants of concern. One example of immediate action includes ramping up the ‘test before you go out’ message as people see family and friends over Christmas.

Principally, while businesses are keen to see a roadmap out of plan B in January, should further restrictions be required to protect public health firms will want the maximum amount of time to prepare and adapt.

And, with firms’ ability to trade their way to recovery, particularly in the usually lucrative run up to Christmas, hampered by government measures and messaging, the CBI makes clear that ministers must provide support in lockstep with future restrictions. Specifically, distributing unspent grants can be done now to alleviate firms hit hardest. If restrictions persist following the January 5 review date, then further business rates relief and other help to reduce fixed costs should be on the table, the CBI said.

The business group is also keen to see the government in England confirm ahead of the 5^th January review that pupils can use measures such as to ensure educational settings remain open and parents can go to work.

The business group’s recommendations are grouped under six themes and build upon its previous proposals for learning to live with the virus published in September.

1. Forward guidance to support business adaptation.
2. Prioritise mass-testing over mass self-isolation & working from home.
3. Utilise all ‘COVID secure’ tools available to build employee and customer confidence
4. Maximise our world leading vaccine and anti-viral programmes.
5. Proportionate border controls so the UK remains open to the world
6. Support to move in lockstep with restrictions.

Introducing the new proposals on how government and business must learn to live with the virus and its variants, Rain Newton-Smith, CBI Chief Economist, said:

“The onset of omicron means many businesses seeking to get back on their feet are once again reeling from the virus for a second Christmas in a row. Now the Government must act at speed to prevent the need for further restrictions.

“Implementing Plan B was the right thing to do – but it has dented demand and consumer confidence. And further support for struggling firms will be needed if fresh government public health measures prevent firms trading their way to recovery.

“Cash is king, so helping affected firms with cashflow, by ensuring unspent local authority grants are distributed to firms, giving firms more headroom to manage their coronavirus debt repayments and considering measures to reduce the fixed costs of businesses where demand is severely affected should be on the table. Meanwhile creating feedback loops for business, government and unions as the Omicron wave continues will be vital for assessing the impact of restrictions and the need for future support.

“Clearer communications must characterise this next phase of living with the virus and its variants. The Government’s decision to take swift action in response to the emergence of the Omicron variant was the right one. But the speed of the response gave way to a lack of clarity, leading to greater confusion, uncertainty, and concern.

“Having spent the last 20 months oscillating back and forth between open and closed, between freedom and restrictions, the key driver for confidence must now be seeking consistency. The Omicron variant is unlikely to be the final challenge the coronavirus poses the economy or the country. So, the question is: how do we learn to live confidently not just with the virus, but with its variants?”