Economy
Promising economic signs despite GDP drop Former Secretary of State backs the region A former Secretary of State for Business has backed firms in Coventry and Warwickshire to bounce back strongly from the economic impact of coronavirus. MP Greg Clark told a Coventry and Warwickshire Chamber of Commerce #PolicyHour video call that the recovery from the Covid-19 pandemic will present opportunities for growth in the region. Asked about the impact of Covid-19, Mr Clark said the recovery from the pandemic would accelerate plans to upgrade transport and communications infrastructure, as well as boosting a competitive business environment. “Covid is not going to completely change some of the forces that were present before the pandemic struck,” Mr Clark added. “What I think it is actually going to do is accelerate some of them, for example with the development of vaccines. “It seems to me that we are going to see an acceleration of trends in a number of areas and I think that sense of acceleration is going to be very important. “Coventry and Warwickshire is certainly in a good position to bounce back and grow after the crisis.” The Tunbridge Wells MP answered questions on a range of topics from the easing of coronavirus restrictions to HS2. Mr Clark said that he has been “a strong supporter” of the HS2 railway project and that it would improve connectivity, including in Coventry and Birmingham. “It should have been done years ago,” he said, “but it will definitely bring benefits in the future.” Mr Clark also backed the government in taking a cautious approach to the easing of coronavirus restrictions, and said that decisions should be based on “data rather than dates”. Sean Rose, policy officer at the Coventry and Warwickshire Chamber of Commerce, said: “We are grateful to Mr Clark for joining us at our #PolicyHour video call and answering questions on a wide range of topics. “As a Chamber, we are doing everything we can to support businesses in the recovery from the pandemic as the final Covid-19 restrictions are eased. “Members received a really useful insight on the opportunities which could arise from the pandemic recovery and some of the trends which could emerge.”
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Business leaders in Coventry and Warwickshire say there are “promising signs” despite the economy shrinking in the first quarter of the year. The latest GDP figures showed that the economy fell by 1.5 per cent in the first three months of 2021. However, the figures for March saw a rise of 2.1 per cent as lockdown restrictions began to ease. Sean Rose, policy officer at the Coventry and Warwickshire Chamber of Commerce, said: “The economy has, undoubtedly, been severely impacted over the past year and there is little surprise that it dipped again in the first quarter of the year because of the restrictions in place due to the lockdown. “As those have eased, we saw the economy start to rebound in March which shows promising signs and with further lifting in
restrictions taking place in line with the government roadmap, we’d anticipate further growth in the coming months. “What isn’t clear is just how quickly the economy can return to the level it was at before the pandemic hit and it is crucial that the government continues to nurture the recovery. “Businesses should contact the Chamber should they need any support to help them grow as restrictions lift further in the coming weeks.” Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: “While the UK economy contracted in the first quarter, the downbeat headline figure masks a renewed momentum through the quarter from January’s drop in output to an exceptionally strong March outturn as lockdown measures started to ease.
Sean Rose, Policy Officer
“The first quarter decline should be followed by a robust rebound in the second quarter as the effects of the release of pent-up demand, as restrictions ease and the strong vaccine rollout continues, are fully felt. “However, with the longer-term economic damage caused by coronavirus likely to increasingly weigh on activity as government support winds down, the recovery may be slower than many, including the Bank of England, currently predict.”
Actions need to speak as loud as words, warns Chamber The Chamber has urged the Government to match rhetoric with action after a raft of business measures were announced in the Queen’s Speech. The Government included improved skills training, reform of the planning system, more housebuilding, boosted public transport and increased connectivity in the measures it plans to bring forward in the coming months. The Coventry and Warwickshire Chamber of Commerce said that all the policy areas were relevant to helping companies recover from the recession caused by Covid, but added that similar promises had been made before. Sean Rose, Policy Officer at the Chamber, said: “We welcome measures such as an increased focus on skills to match market needs, and reform of the planning system – but these and other areas have been at heart of Government announcements in the past and clearly have not had the desired impact.
“We are just really keen to see rhetoric matched with action because while businesses have shown great resilience and flexibility in the way they have handled the recent challenges, they need targeted, relevant and practical help as they continue to pull us out of the economic slump. “If these measures translate into that sort of assistance, then business will be able to recover quicker and in a more sustainable way and that is what we need to happen.” Claire Walker, Co-Executive Director of the BCC, said: “Businesses will welcome the clear direction in today’s Queen’s Speech as the Government looks to boost the economy and place all parts of the UK on an equal footing. “As companies begin the slow process of rebuilding following the pandemic it is vital that they are given the support they need to kick start their recovery. “A strong focus on improving digital and technical skills that
match the needs of local business will be a key driver in making that happen. “Improving rail and bus services, maximising the national coverage of 5G mobile services and superfast broadband, while simplifying the planning system are important enablers to ensuring companies can rebuild and grow. “These are all challenges that have existed for a long time, and we are now at a critical juncture where they must be addressed. This opportunity cannot be wasted, and the Chamber network will have a laser focus to ensure the Government delivers on its promises. “It is disappointing that new employment legislation that could address the flexibility of working practices did not feature. The pandemic has changed the way we work forever, and employers need clear guidance on how to provide long-term flexible working arrangements that will make jobs more accessible for everyone.”
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