IGD - Economics bulletin 16 September

Date : 16 September 2020

Your overview of political and economic news with a focus on the food and consumer goods industry, featuring the latest guidance on COVID-19 and planning for the end of the transition period with the EU.

New COVID-19 restrictions

With an increase in COVID-19 infections (see LINK), the government has imposed new restrictions nationally to try and stop the spread. This includes the “rule of six”, whereby in England from Monday 14 September, nobody should meet socially in groups of more than six people.

See LINK for further details.

Similar rules in Wales and Scotland do not include children under 11 and 12 respectively.

New local lockdowns

Alongside the new “rule of six”, tighter local restrictions have been introduced in some areas where there have been spikes. There have been new restrictions on households mixing in Birmingham, Sandwell and Solihull. Residents must not socialise with other people outside of their own households. See LINK for details.

Renfrewshire and East Dunbartonshire in Scotland, and Caerphilly county in south Wales (see LINK) remain in local lockdown, with people in both regions being restricted from visiting friends or having anyone stay overnight. Enhanced restrictions also remain in place in Glasgow, East Renfrewshire and West Dunbartonshire.

There are also localised restrictions on indoor household gatherings in North and South Lanarkshire. See LINK for further details.

See LINK for the latest Public Health England’s weekly surveillance report.

Covid-19 testing

Issues with the capacity of current testing facilities continue, having last week reached a ‘critical pinch point’ in processing tests. The Home Secretary has said that it is “unacceptable” that some people were struggling to get tests, and "much more work needs to be undertaken with Public Health England".

Last week the Prime Minister announced plans for testing capacity to increase from 350,000 to 500,000 tests a day by the end of October. He also announced “project moonshot” – the government’s plan for mass rapid testing that could potentially cost £100bn. Although, further development of the technology will be required to deliver testing at this scale.

New Covid-19 tracing app

It has been announced that a new tracing app will be launched on 24 September in England and Wales. This follows trials in the Isle of Wight and Newham (London) in a number of different settings, including food manufacturing and distribution. The new, easier to use, app is based on Apple and Google technology. It will work alongside enhanced contact tracing services and testing to help minimise the spread of COVID-19.

Users will also be able to “check in” to venues, so they may be alerted if they have been to a location that is linked to multiple infections.

Businesses are being encouraged to ensure they have NHS QR code posters visible on entry for customers to check-in.

See LINK for more details. See LINK for details of the app.

The app only alerts contacts if there has been a positive test result rather than symptoms. There is a pause button – which users can use if they are in a safe environment such as behind a protective screen or if they need to leave their mobile in a locker.

However, there are some limitations - It only works on newer phones. It won’t be available to under 18s.

A new Protect Scotland app launched last week. It has been reported that more than 600,000 people have downloaded the app.

See LINK for more details.

COVID-19 – National shielding

There are reports that people most at risk from COVID-19 will be sent letters with tailored advice concerning shielding. This will be based on a ‘risk model’ which will factor in underlying health conditions, age, sex and weight.

Oxford vaccine trials

AstraZeneca and Oxford University have announced that trials of a COVID-19 vaccine will resume. The trials were paused last week to investigate any links to the vaccine after one of the participants fell ill.

UK-EU trade talks

The eighth round of formal trade talks between the EU and UK ended in London last week with no sign of a deal. The two sides had been careful to avoid raising expectations of a deal given the lack of progress in previous rounds. The two sides remain dead-locked in the major “red line” areas. These include fisheries, governance, market regulation and state aid. A final round of talks will be held on 28 September. More rounds could be added, if needed.

The meeting of the European Council on 15 October is the last point at which it will be practical to give effect to any deal that emerges, if the deal is to be in place when the implementation period ends on 31 December.

UK Prime Minister Boris Johnson has made a statement, reiterating that he is not prepared to extend negotiations beyond that point and stating that there will be no deviation from the UK’s settled position.

IGD continues to urge members to prepare for “no-deal”.

IGD recently hosted an EU exit webinar. You can watch a recording of the webinar to hear the latest on what the UK’s exit from the EU could mean for the food and consumer goods industry. See LINK.

Internal markets bill

Negotiations between the UK and EU have been impacted by the new Internal Markets Bill. When the transition period ends, various powers currently exercised by the EU will revert to the UK.

Many of these are “devolved” responsibilities, including agricultural policy and food market regulation. This raises the possibility that policy may come to vary between the different parts of the UK, limiting internal trade.

If passed, the Bill would likely breach the Withdrawal Agreement. The Withdrawal Agreement provides that market regulation in Northern Ireland will be aligned to EU rules – this is opposed to the intention of the Bill. The Bill, which passed its second reading in the House of Commons on Monday, has attracted criticism from the EU, the Scottish and Welsh governments and from a number of MPs and members of the House of Lords. Specific areas of concern include state aid and administration of exports from GB to Northern Ireland.

UK-Japan trade deal

The UK and Japan have agreed a trade deal. Both goods and services are covered, including financial services which make up 28% of UK exports to Japan. See LINK for full details.

More economic news and analysis