The beginning of a year – and, indeed, of a new decade – is an appropriate time to review and analyse recent events. Despite the uncertainty that characterised 2019, I have to admit that I am looking forward with optimism to the Twenties in general and 2020 in particular.
A decisive vote has to be good news for business
December saw Boris Johnson and the Conservative party achieve a resounding majority in the General Election. The vast majority of our clients with whom I discussed the election simply did not want Jeremy Corbyn to be Prime Minister. The consensus was that Mr Corbyn was anti-business and that the spending commitments he promised were unrealistic. Simultaneously, our clients were strongly of the opinion that a decisive outcome on Brexit was highly desirable.
Whether or not you voted for Mr Johnson, the result of the election suggested that his much-repeated “Get Brexit done” mantra had struck a chord with a majority of the electorate. Even those who voted Remain in the 2016 referendum have now, it would appear, accepted the inevitability of the United Kingdom’s departure from the European Union.
However, while as a nation we may have achieved a measure of short-term certainty, it is undeniable that a considerable amount of work remains to be completed. The UK has yet to finalise agreements on trade and the rights of British people abroad or EU nationals living here – let alone a trade deal with the USA. It must be said, though, that Mr Johnson appears to enjoy a positive relationship with Donald Trump, which gives rise to hope that Britain can achieve a propitious deal there.
While there are significant obstacles still to overcome, these should be more surmountable now that Britain has a government in place with a powerful majority. I know I’m not alone in believing with some confidence that those trade deals will be agreed in 2020 and I fervently hope they are as advantageous to Britain as possible.
It was encouraging to hear President Macron of France insist recently that he sees Britain as a friend. As for the Germans, we enjoy a healthy mutual trading relationship and it makes little logical sense, therefore, for us to want to damage each other. The economies of Britain and the EU are generally flat at present, so it’s surely incumbent on all sides to achieve a trade deal swiftly.
An effective immigration process will be crucial to success
Mr Johnson has stated publicly that there will be sustained investment in infrastructure, which is a promising note to strike. The consequence should be improved telecoms, rail, air and road links, and our clients are welcoming the fact that the government has pledged to make such an investment – even though it may take time for the benefits to be fully felt.
Employers will always need skilled workers, and they have to be able to import talent if necessary, so the points-based immigration system that has been mooted needs to be effective while not being excessively bureaucratic.
At Eton Bridge Partners, we regularly source and place EU and foreign nationals. We appreciate fully that, if one of our clients wishes to bring in an accountant from inside or outside the EU and has identified a candidate who is an ideal fit for the position in question, they need to be able to navigate their way through the process quickly.
Unemployment in the UK is at its lowest since 1975, and the employment rate is at 76.2%, which represents an all-time high. At the same time, there are an estimated 794,000 vacancies in the UK, a statistic that is linked to the ongoing skills gap.
Therefore, if a points-based immigration system is introduced, it will be critical that business and the government work together to identify skills shortages in a particular area. The government must be highly effective attracting people from overseas to fill those gaps and ensure there is a minimum of regulation for the businesses in question to negotiate. In the long term, the government should focus on apprenticeships in the relevant areas so that people are being trained up to fill those jobs.
High street remains at a low ebb
I have discussed previously the travails of the retail sector, and the economic uncertainty of 2019 continued to plague the high street in the final quarter of the year. It’s been calculated that more than 16,000 shops in the UK closed in 2019, with the loss of more than 140,000 jobs.
It is undeniably concerning when a major name such as John Lewis reporting a substantial fall in profits; at the same time, it is encouraging to learn that another familiar brand, Next, has elevated its profit forecast.
One household name that closed its doors recently was Thomas Cook. Please let me emphasise that I’m not at all blasé about innocent people losing their jobs, and it’s always a sobering moment when a major brand disappears. However, as I’ve said before, it’s essential that high-street businesses respond to the changing business landscape and undergo a process of constant modernisation.
Thomas Cook continued to focus strongly on package holidays in an era when people like to book online and pay separately for flights and hotels. The contrast is most vivid when you consider the digital consumer space and the businesses like Amazon that specialise in exceptional customer services. Such companies are nimble and agile, they embrace modern technology and their focus is unerringly on the needs of the consumer.
I remain mystified at the reluctance of some of the bigger, slower beasts of the retail field to place a far greater emphasis on understanding their customer base, whether they operate in a B2B or B2C capacity, and take major business decisions based on that insight.
Conclusions from 2019 and predictions for 2020
I’m delighted to be able to report that last year was a very strong one for Eton Bridge Partners, where my team – and the business as a whole – enjoyed substantial growth.
Despit the uncertainty over Brexit, the recruitment market remained generally buoyant. Companies took the courageous course and were decisive about onboarding new talent, which duly proved that in challenging times it is possible not merely to survive, but to thrive. It is also apparent that we live in a far more diverse era; our practice placed increasing numbers of female and BAME candidates in senior roles in 2019.
I was intrigued to note before Christmas that the Bank of England said it might cut interest rates if the economy failed to see a “Boris bounce”. The early signs are that such a measure will not be necessary.
Our clients are generally very positive in their outlook since the General Election and the turn of the year. It was also heartening to read the results of a Deloitte survey of CFOs that evidenced a significant increase in confidence, with pessimism over the long-term impact of Brexit currently at its lowest level since 2017. On a global scale, the World Bank believes the world economy will grow by 2.5% this year, up from 2.4% in 2019.
Whenever there is a change of year or decade, it’s tempting to try to discern new trends – but our clients are telling me that 2020 will be broadly similar to 2019. We expect further progress and strong performance in areas such as the tech sector and pharmaceuticals. The importance of embracing AI and robotics to create greater efficiency in the finance function will continue to grow. 2020 promises to be a fascinating, challenging and ultimately rewarding year.
It remains only for me to wish you a happy and prosperous New Year and every success for the Twenties.
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