Reigniting the UK economy will be a complex task. While vaccine rollout has increased optimism for a rapid recovery, plenty of hurdles remain. Business confidence must be renewed, consumer freedoms restored, and connections rebuilt between companies, cities and nations if we are to regain lost ground.
Indeed, it is this idea of repairing connections which is proving one of the biggest challenges of recovery – yet one with the potential to yield some of the biggest rewards. The Government’s Global Travel Taskforce has gone some way to doing this – publishing its review just last week - but it is very much still just a beginning.
Restarting global traffic is unquestionably a cross-economy priority. The importance of international connectivity extends far beyond firms directly involved in the travel sector. Air, sea and rail routes underpin much activity across the wider economy – as illustrated by recent events in the Suez.
Travel gives businesses access to customers and talent, links firms to global markets, and enables imports and exports via passenger flights, ferry routes, and the Channel Tunnel. Everything from the UK’s world-leading professional services firms, to universities, manufacturers, retailers, and hospitality companies, thrive in large part due to the movement of people and goods, not only into and out of the UK, but between its constituent nations too. There can be no true recovery until this is restored.
Airlines UK data reveals a lost summer of air travel alone would cost the UK an additional £26billion, plus £55.7billion in lost trade and 574,000 jobs. The beleaguered UK tourism industry would take a further £3billion hit. But this goes beyond one industry – it strikes to the heart of the UK economy.
That’s why it is vital that government creates a realistic plan for reopening which generates confidence and momentum. And that’s why all eyes were on the report from the Global Travel Taskforce last week, seeking solutions to the international travel conundrum.
It’s the start of a plan. Their recommendations have included a traffic light system for destination countries, depending on the prevalence of the virus at any one time and the success of vaccination roll outs around the world. While it is not quite clear, yet which countries will be red, amber or green this summer, it does offer welcome confirmation that the UK will be taking a risk-based approach and scaling back onerous quarantine restrictions for travellers from some destinations.
With increased transmission and new Covid variants emerging overseas, particularly in key markets for UK trade, firms recognise the government’s need to proceed with caution on international travel. However, further turbulence is now expected for firms in the hard-hit international travel sector as the proposed testing regime from the Government will limit travel possibilities and hamstring demand by passing significant costs onto consumers. The industry will need time to prepare, while it may be necessary to reopen discussions about further financial support measures if firms’ ability to trade their way to recovery continues to be restricted. As the government is now making mass rapid lateral flow tests available for everyone in the country, including workplaces to test 2 times a week, they must consider using these tests to open up travel as it will be far easier, quicker, cheaper and more practical.
The taskforce recommendations represent a starting point for engagement with industry about how to scale-up international travel. Key milestones to review progress must be agreed in partnership with the travel industry, their supply chains and wider sectors that rely on global connectivity to ensure the most appropriate balance between driving economic recovery and protecting public health.
None of us can afford a badly managed restart necessitating further lockdowns. Yet the success of the UK’s vaccine push means pragmatic consideration can now be given to a measured, risk-based reopening in the near future. Indeed, our progress means Britain has a unique opportunity to lead the world in restarting international travel – and in doing so, reap the economic rewards earned by being ahead of competitors.
Successfully restarting travel will reopen access to world markets. This would provide an instant lift to UK competitiveness, for sectors as diverse as professional services through to advanced manufacturing.
Companies know the Global Travel Taskforce marks only the beginning of what may be a long and likely difficult journey. But business – and society at large – craves the opportunities which international travel creates. Positive momentum to remove barriers and establish a new normal cannot come too soon.
[Lord Karan Bilimoria CBE DL is President of the CBI. He is the founder of Cobra Beer, Chairman of the Cobra Beer Partnership Limited, a Joint Venture with Molson Coors, and Chairman of Molson Coors Cobra India. He is the Founding Chairman of the UK India Business Council, a Deputy Lieutenant of Greater London, and a former Chancellor of Thames Valley University (now the University of West London) - the youngest University Chancellor in the UK when appointed].
