The Conservative mayor of the West Midlands has called on the chancellor, Rishi Sunak, to more than treble the £3,000 monthly grant for businesses forced to shut by the coronavirus to an average £10,000, as the new variant of Covid-19 threatens to extend the period of shutdown deep into 2021.
Andy Street said that 2021 could be a year of “dramatic” bounceback for the region, which he believes has the potential to grow faster than other parts of the UK after the virus-driven slump of 2020.
But he told The Independent that much of the West Midlands economy – particularly its significant conference and live event sector – was on hold until coronavirus restrictions were lifted, and may companies would struggle to hold on if that moment is delayed by the new variant from the spring into the summer.
The West Midlands economy took an estimated 13 per cent hit in 2020 and saw a 97,000 rise in its claimant count, nearly doubling over the first nine months of the pandemic, said Mr Street. But he said a 5-8 per cent rebound was possible in 2021 once the region has broken out of restrictions and returned to normal social and economic life.
“I cannot answer how much worse it will get because we do not know how grave the situation in the next few months will be,” said the former John Lewis boss. “But it all comes back to the same thing – we’ve got to protect the businesses that we have got.”
Action was needed from government on three key fronts to make 2021 a “year of recovery”, he said.
First was a substantial increase in Mr Sunak’s monthly local restrictions support grant for businesses closed by Covid, which he said should be moved from a flat-rate £3,000 to a sliding-scale grant worth an average of £10,000 depending on companies’ fixed costs.
“We’ve got to protect as many businesses as we can in the short term, so they’re there for the rebound,” he said. “It is designed to be the lifeline over the bridge but, with the overheads of most hospitality businesses at the moment, it’s not sufficient.
“In the conference sector our anchor institutions, like the NEC, will definitely survive, but they can’t just reopen overnight. They need to have a date to plan on and take bookings for, and that is very dependent on how quickly we can contain this new spike and how quickly we can get the vaccine done. The question is: how many small businesses that supply that sector will go under during that time?”
His second call was for a devolved approach to retraining for workers left unemployed by the pandemic, giving councils and metro mayors support for locally driven initiatives like the sector-based work academies and digital retraining schemes piloted in the West Midlands.
“We can’t do it outwith national government, but central government will get good results by trusting the regions to use the structures they’ve already got. Our argument is, play the regions in. They’ve got an understanding, they’ve got structures that already work. Play us in.”
Third was an appeal for “catalytic investment” to ensure that post-coronavirus growth comes in the industries of the future such as electric cars, battery technology and life sciences.
Mr Street said the launch of the National Battery Centre in Coventry and a £210m investment in a new Health Innovation Campus in south Birmingham made him “very optimistic” that the region was well-placed to seize opportunities for growth after the pandemic, including through a proposed “Gigafactory” to supply the automotive industry.
These sorts of projects, building on the region’s manufacturing and car-building heritage, have needed only “a very small amount of pump-priming” from the state to attract money from the private sector, he said.
“It’s a small proportion of the total investment, but what we’re really saying as a region is we’ve got to find those big opportunities where a little public sector money can leverage that private sector cash,” said Mr Street.
Looking ahead to 2021, the mayor said he had three messages for central government.
“First, thanks for what you’ve already done – there’s been an unprecedented amount of support for business and we mustn’t forget that,” he said.
“Second, let’s really make sure the commitment to viable businesses is there. And third, let’s think about where the competitive sectors are for Britain on the other side of this. And let’s make sure we are making those catalytic investments for them.”
He characterised the mood in the West Midlands going into 2021 as “resolute”.
“People here are very modest, very self-effacing, they just get on with things. I think those characteristics will see us through, and I still think that the recovery can be dramatic here if we get all those ingredients we’ve talked about.”
