Covid-19: Businesses and the Private Sector

Motion to Consider

Moved by

That the Virtual Proceedings do consider the contribution made by businesses and the wider private sector in addressing the COVID-19 pandemic.

The Motion was considered in a Virtual Proceeding via video call.

My Lords, I am so sorry for the short delay, which has possibly been my fault with the technology. I am truly grateful to my Whips for this opportunity. I also thank the many noble Lords who have indicated that they want to contribute today. Even those who have made it through the virtual culling process have only two minutes, which is pretty thin gruel, and I am sorry, but this is a discussion that we will need to continue.

We are here to discuss the private sector, but I start by thanking all those who have done and are doing so much in the public sector: our extraordinary doctors, nurses, porters, receptionists, ambulance drivers—everyone in the National Health Service. I also thank the local authority workers, the civil servants, the members of the Armed Forces and police forces, not forgetting our charities and the millions of volunteers who do so much to bring our community together. At 8 o’clock tonight I will be applauding them all.

How often have we heard the cry, “I can’t wait to get back to normal”? We have even thought it ourselves, but we will not be going back to whatever normal might have been. We will have to move forward to meet what will be a changed world, with its own very different challenges. It is the private sector—not just big business, but the medium and smaller enterprises, start-ups and self-employed—that holds the answers to meeting those challenges.

What has the private sector done so far? What Britain has needed, it has delivered. A couple of months ago we found ourselves confronted by one of the most acute situations of modern times: literally a matter of life, death and days. The private sector rose to the challenge magnificently. We were desperate for more intensive care beds, so we built Nightingale hospitals. Yes, under the supervision of the Army and the NHS, but who actually built them from nothing in record time? It was contractors such as Mace, BDP, Vinci and McAlpine. Meanwhile, the private health sector provided 8,000 beds and more than 10,000 nurses to help the NHS take the strain. Who can forget the care homes, whose workers have toiled tirelessly through so many difficulties?

We needed face visors, so step forward the Royal Mint, Bollé Safety and Jaguar Land Rover, many of which manufactured visors in days, from a standing start. Protective gowns have come from Mulberry, Burberry, Barbour, Imperial Polythene and literally hundreds of others. The fightback has been tremendous, with well over 1 billion PPE items already delivered to the front line. I thank every worker involved.

But I am not finished. We need millions of test kits; where will we get them? From Roche, AstraZeneca and GSK. It is the same story with ventilators: Babcock, BAE, Honeywell, Rolls-Royce, Mercedes and even McLaren Formula 1. It is a long and extraordinarily diverse list of names, and I make no apologies for continuing with this roll call of honour. Brewers have turned out millions of bottles of sanitisers, and so have cosmetics manufacturers. Chivas and Budweiser have been standing alongside Estée Lauder and L’Oréal, not forgetting Diageo and PZ Cussons. Private enterprise has shown itself to be extraordinarily adaptive. I read on the BBC that one quick-witted manufacturer has turned his 3D-printing operation, which usually makes sex toys, to producing ear protectors for the NHS. This is not quite swords into ploughshares, perhaps, but it seems there is no end to the entrepreneurial imagination.

I congratulate the noble Lord, Lord Dobbs, on his initiative in getting this debate. I assure him that I am neither elderly nor infirm. In my two minutes, I wish to emphasise the importance of both private and not-for-profit organisations and businesses, not only in seeing us through these last 10 difficult weeks but for the future.

From care homes to transport operators, from equipment manufacturers to those producing, distributing and delivering food, we have seen the most enormous initiative, of which the noble Lord, Lord Dobbs, has spoken. He mentioned the “golden triangle” universities. I would like to see the initiative shown there replicated across the country. If the Government’s agenda is to be balanced, including in recovery, and if we are to invest in productivity and recovery right across the nation, we will need to see public-private partnership, research and knowledge transfer, manufacturing and innovation all coming together. I hope that the north of England—not just west but east of the Pennines—can replicate that. The noble Lord, Lord Dobbs, mentioned the initiatives that have been shown, including by McLaren. The Advanced Manufacturing Research Centre here in the city of Sheffield will be an exemplar for the future, perhaps by linking the university with those across the Pennines.

Will the Minister place emphasis, along with the sustainability research task force, on that rebalancing of the economy, the initiative and innovation of recovery, and on the entrepreneurship that comes from people working together?

I thank the noble Lord, Lord Dobbs, for the debate, and I very much share the sentiments of the noble Lord, Lord Blunkett. We know there will be very serious long-term consequences for many sectors in the UK economy beyond this immediate shock. For example, the Chancellor has already indicated that the self-employed will be likely to pay higher taxes and national insurance contributions next year, while businesses in Northern Ireland will have greater trade barriers because they were misled by the Government. Those are just two examples.

On a wider scale, we know from analysis in the FT that the UK is being and will be impacted greater than many of our competitors because of the profile of the UK economy on top of the contraction of investment, economic flight, and restrictions on labour mobility that we were already seeing as a consequence of Brexit. Our services-centred economy and the flexibility our businesses have had in a liberalised labour market were both highly integrated into our biggest economic market but from 2021, new barriers are being erected to that market.

Therefore, it is imperative that we have information on the core estimates of what the economic and business impact will be of the proposed trade agreement with the EU. When I asked the Government for this in a debate recently, I received subsequent correspondence from the noble Lord, Lord True, for which I am grateful. However, he said:

“The economic impacts of our trade deal with the EU are the subject of a thriving public debate among analysts. It is impossible for a single model, number or scenario to capture that complexity or represent the varying impacts that will be felt across different parts of the economy.”

It seems to be possible to give a model, number and scenario of the impacts of a hoped-for trade agreement with the US, and a hoped-for Japan agreement, but the Government refuse to do so for what is by far our biggest import and export market. It is not acceptable that we go blind into making serious decisions, impacting on our businesses and private sector for the long term, without the Government releasing core estimates of the economic impact of their proposed agreement with the EU.

My Lords, it is good to have the opportunity to debate Covid-19 in a context wider than health and social care. Sadly, a series of two-minute talking heads on a Zoom screen is very far from being a real debate.

The only economic certainty about Covid-19 is that it is causing massive damage to our economy. The political priority now needs to shift to rebuilding our economy. The Chancellor of the Exchequer has been bold. His job retention scheme and Government-backed loans are delivering on propping up many businesses and jobs for now. However, many will not be viable in the face of debt burdens, higher operating costs and changed demand in a post-Covid-19 world. Businesses and employment will be lost. We will need an economic renaissance with business at its heart. Growth and jobs come from new businesses and new investments in products and markets. I do not doubt that that there will be a role for publicly funded investment in the short term, but the foundation of a successful economy is not a big state; it is a big and effective private sector.

The Government must focus on encouraging small businesses, start-ups and scale-ups. They should listen to organisations representing SMEs and not, for example, the CBI. A holiday for SMEs from all non-essential regulations would be a terrific start. We need to move from risk aversion to sensible risk-taking. Let us have an end to draconian Covid-19 restrictions as soon as possible so that businesses and individuals can return to the normal world of taking responsibility for making informed decisions. Economic recovery cannot begin without that.

In this crisis, what has worked is not the Government working on their own but collaboration between them and the private sector. The first Nightingale Hospital, which the noble Lord, Lord Dobbs, spoke about—4,000 beds put up in nine days—happened because the Army, the Gurkhas, the NHS, the University of East London and the private sector all worked to put it together. On vaccines, we have seen Oxford, other universities and industry working with the Government and all coming together. Testing was not working when it was just in the hands of PHE; now it is because there is a collaborative effort between laboratories, research institutes, the Cambridge Biomedical Campus and, for example, AstraZeneca and GSK, all working together.

The CBI, where I am a vice-president, has a business heroes campaign, which urges organisations to join a nationwide effort and share examples of best practice. The CBI is helping to co-ordinate the efforts of companies and stepping forward to provide assistance where possible, from providing computers for pupils to PPE for healthcare and care workers. At the University of Birmingham, where I am chancellor, academics from across the business school are working with business intermediaries, such as the CBI, to reskill people for future working needs on working health and well-being.

As business, we are very grateful for all the help the Chancellor and the Government have given us, but the hospitality sector, which my business is in, is suffering greatly. It has basically been shut for two months and will take a long time to recover, especially if social distancing measures are meant to be in place. Through the Government’s CBILS loans, launched two months ago, 40,000 businesses have been given just over £7 billion. I have been urging the Government to give 100% guaranteed loans for business, and they listened and have done that. In just over two weeks, the bounce-back loan scheme is up to £50,000, and 464,393 companies have received £14 billion. This has worked.

My Lords, in parallel to the magnificent efforts of the NHS and other parts of the public sector, we have seen a fantastic response from the private sector but, disappointingly, there are examples of where the Government have seemed reluctant to respond to offers of help. I particularly commend those engineering and manufacturing companies that have shifted their production processes to assist in the manufacture of ventilators. Then there are staff in the health devices industry who are clinically trained, who have returned to the NHS at their employer’s expense. There are pharmaceutical companies at the forefront of efforts, with universities, to develop vaccines while still securing the essential supply of medicines.

Alongside this, there have been a number of puzzling examples of the failure to embrace the potential of more such partnerships. In March, when the decision was made to withdraw community testing and tracing due to lack of capacity, why were businesses, universities and research institutes not asked to help? Why were dozens of UK companies that responded to the Government’s request to switch production to PPE ignored? And why did the Government not embrace the Covid-19 symptom tracker—developed by researchers at King’s College London and the health data science company ZOE—which has 3.6 million people contributing information?

Finally, why have the Government insisted on developing their centralised contact tracing app, which is in difficulty at the moment, as opposed to the decentralised model developed by Apple and Google? I fear that this kind of go-it-alone preciousness has been characteristic of the Government’s approach to the crisis, with a failure to learn from international experience and delay in taking decisive action. We must see better in the future.

My Lords, first, I thank the noble Lord, Lord Dobbs, for initiating this much-needed debate. Secondly, I declare my interest as the father of a small businessman who has a chain of bicycle shops—a very good thing to have at the moment. Many small business people have worked far harder during this closedown than at any time, because they have had to juggle staff—some of whom have wanted to be furloughed, as they have been in vulnerable positions—and a multitude of problems.

When this is over, they will be looking for a level playing field and fair treatment. They have heard what the Chancellor said about higher taxes for small businesses and they are prepared to pay their fair share. But they also look around and see many large businesses, often not domiciled in the United Kingdom for tax purposes, queuing up and asking for large amounts of money from public funds.

The Government must, with the help of the OECD, the EU and other international bodies, tackle the business of tax avoidance and make sure that everybody pays their fair share into what will be a crippled economy. It is necessary that the Richard Bransons and Philip Greens of this world are also brought to the chequebook when paying their taxes. I ask the Government to commit to getting a fair deal from big businesses, as well as tax from small businesses. If they do that, I am sure that all workers in small businesses will join together in the same common endeavour in which they have been engaged for the last few weeks.

My Lords, the noble Lord, Lord Dobbs, said that the private sector is the only solution to get us out of this. I disagree. We are a mixed economy, a society and a national community. We need our society, community and democracy to have the same high quality if we are to recover from all this.

The Government’s early mistakes in responding to this endeavour were in turning to large outsourcing companies to provide services in testing, and now in recruiting for tracing and managing PPE, and neglecting our local democracy and local authorities—which have been bypassed time and time again—and the local volunteers wanting to join. I have just contributed to a school in Bradford, which sent out an appeal for a new cutting edge for its 3D printer because, while the school was closed, it has been printing screens for local hospitals. There are all sorts of local initiatives like that going on, and I have heard the frustrations of people at the local level who have applied and offered to help.

The SMEs so strongly supported by the noble Baroness, Lady Noakes, and I, have not been caught up, because this approach has been so top-down. I have also heard from those in universities, particularly biologists, who have wanted to help and turn over their facilities, but take-up has been slow from an overly centralised Government in England.

My strong message here is that we have made mistakes in not engaging local democracy and local enthusiasm, and in not treating people as citizens, as well as consumers and patients. The private sector at the local, as well as the national, level has to be part of that. We are a national community of citizens, as well as consumers, and this is a national emergency that involves us all.