The current lockdown, yesterday’s budget and future ‘revenge spending’ will impact your supply chain and logistics strategy

Boris Johnson has set the country on a “cautious” road-map for restoring normal life and economic activity by June 21st, with government support for the economy for months to come.

There are four main stages (see below) in the road-map for the lifting of coronavirus restrictions, running from the 8th March, through the 12th April (when shops and other venues can begin to open), 17th May (when pubs reopen indoors) to the 21st June when remaining parts of the economy open.

With parts of the economy facing weeks or months of further restrictions, the Chancellor’s budget, announced yesterday contains more measures to help individuals and companies through the final phase of the Covid-19 pandemic and post-lockdown.

On balance the budget contains no nasty surprises and plenty of positive actions, which means that we are likely to see import levels continuing to increase as firms begin to restock ahead of the economy reopening, with the very real prospect of a massive spike, that may persist for some time, as consumers unleash their ‘revenge spending’.

Having endured months with no opportunities to spend money on holidays, drinks out, restaurants or the arts, ’Revenge spending’ follows, when a cooped up populace is finally freed from lockdown. This is reflected in the reported healthy economic predictions on the growth and economic recovery announced for 2021 and 2022 in yesterday’s UK Budget.

We consider the highlights………

Rishi Sunak’s second Budget was aimed at restarting the UK’s economy after lockdown, with measures to boost the housing market and extend furlough support to September.

We welcome the decision to freeze fuel duties, which is a direct cost to businesses that need to transport cargo.

It is anticipated by HMG that the UK economy will grow by 4% in 2021 and over 7% in 2022 which will, if this is the case, restore the UK economy to pre-pandemic levels in 2020, and in fact beyond. If this is the case there will be potentially huge demand for global shipping and continued pressures on the logistics and supply chain infrastructure within The UK. Metro will be adapting our approach accordingly and adopting new processes and innovation to ensure customers are receiving the best fit solutions in what would be the biggest growth period seen since official records began in 1949.

Metro continue to be committed and active at the leading edge of the logistics sector in the developments of the next generation of professional forwarders, with our apprenticeship and undergraduate placement programmes. We are pleased to see additional investment in apprentices, placements and training, which will be embraced within our organisation and promoted nationally.

England Freeport’s

The first eight freeport locations have been revealed. Described as “special economic zones’’ they are intended to make it easier and cheaper to do business with a variety of tax cuts and simpler planning rules. In summary they are located at the following locations with a further two to be announced in The UK under the current proposal :-

• East Midlands Airport
• Felixstowe and Harwich
• Humber
• Liverpool City Region
• Plymouth
• Solent
• Thames
• Teesside

Attracting investment

Dubbing it the biggest tax cut in modern history, the government has increased tax relief, to spur business investment and drive productivity.

For the next two years when companies invest they will be able to reduce their tax bill by 130% of the cost.

Metro will continue to invest in colleagues (established and new to the business), resources and relationships/ partnerships taking further advantage of the HMG announced stimulus packages and assistance in developing our solutions to customers.

Building confidence

The chancellor announced a number of measures which will support businesses and give consumers confidence to act positively, as lockdown is lifted and the economy begins its recovery.

There are no income, NI or VAT tax increases, in a major boost for workers and available consumer spending ability.

Alcohol and fuel duties are frozen, while stamp duty is extended for a further three months

The lockdown recovery road map

Stage 1 – from March 8th and March 29th

• Pupils return to schools
• Two people from different households can meet outdoors for recreation
• Care home residents can receive one visitor

Stage 1 – from March 29th

• Two households will be able to meet in private gardens
• Households can gather outdoors under “rule of six” restriction
• Encouragement for people to stay local and work from home where possible
• Most international travel will still be banned

Stage 2 from April 12th

• Non-essential retail reopens
• Self-catering holidays in England can resume
• Indoor leisure facilities reopen
• Pubs and restaurants can serve customers outdoors

Stage 3 – from May 17th

• Most outdoor social contact restrictions lifted
• Indoor mixing allowed between two households
• Pubs and restaurants will be able to reopen indoor
• Museums will also reopen
• Sports arenas will start to admit people within new limits

Stage 4 – from June 21st

• Lift all legal limits on social contact
• Reopen all remaining parts of the economy

In summary, a positive injection has been proposed, that will add to the growth of the UK economy and your trading activity with Britain in the global arena, during unprecedented times, as we exit, hopefully, the pandemic environment, and the relationship with EU continues to devolve and evolve over coming months and years boosting industry and the trading position with the rest of the world’s economies.

Metro are at the forefront of assisting our customers success and develop the ability to trade and grow internationally, with innovation and market leading supply chain methods and strategies.

For further information on the latest logistics platforms and market intelligence please contact Ian Barnes or Grant Liddell for detail and recommendations, on how we can drive your business forward into the new era of recovery and expansion!