Home » Editor's Choice » Could coronavirus reshape British manufacturing? (May 12)

Could coronavirus reshape British manufacturing? (May 12)

Post-virus everything is going to change. That’s the dominant view of national and international media. But how exactly do they see the future? This regular digest section gives some of their answers and views/Edited by George Hamilton

In this edition (May 12)

  • Could coronavirus reshape British manufacturing?
  • More companies working together, plus bringing, at least some, supply chains home
  • TOURISM: Tourism NI have recently asked us to stay at home to save the local £1 bn tourist industry, and these three reports show it may well get its wish.
  • #1 British resorts brace themselves for a staycation stampede
    Surge in demand for domestic breaks could ‘rescue the summer’
  • #2 Travel meltdown — is this the end of the overseas summer holiday?
    Only thing travelling around the world is a lethal disease
  • #3 Over-60s may not be able to holiday overseas for a year
    Many travel insurers will not cover coronavirus,
  • CYCLING REVOLUTION? Cities worldwide say yes. In the UK government pledges £2 bn, as London, and 30 other UK councils, are putting plans in place.
  • #1 £2 billion package to create new era for cycling and walking .
    ‘Pop-up’ bike lanes, wider pavements, cycle and bus only corridors promised
  • #2 Virus forcing more roadspace for cyclists/pedestrians across UK
    Temporary measures to promote green, socially distant travel may become permanent
  • #3 Cities in Europe, US and Africa opt for cycle lanes, closing streets for recreation
    World’s mayors aim to shape green recovery from coronavirus crisis
  • UK to blame hard Brexit on COVID-19, warns EU trade chief
    Virus is going to be blamed for all the fallout from Brexit
  • …and, finally, fishing for good news and feeling chipper (boom, boom!): British fish and chips shops rebounding with wartime spirit
    Virus driven changes in working practices may become the new normal

Could coronavirus reshape British manufacturing?

In April, as the virus took hold in the UK, the government’s call for more ventilators triggered a wave of retrofitting, innovation and retooling among manufacturers. It was all coordinated at a level that would have seemed impossible even a few short months ago, leading many British companies to consider whether it will have long-term benefits for their country’s manufacturing sector.

Design and architecture firms, agrifood giants and brands such as Burberry have also taken similar steps to answer the government’s call. In a growing number of cases, former competitors are working together to produce protective equipment for first responders.

“They are recognising that they want to share knowledge, insight [and] help each other – and in many cases, the supply chains are so integrated that firms are converting their warehouse spaces, seconding staff to each other,” says Seamus Nevin, chief economist at Make UK. “Product development has been really rapid but this level of flexibility demonstrates how important it is to have a robust manufacturing base when these challenges arise.”

The demand created by efforts to slow the spread of the virus may also alter how companies are structured. “Companies may look at forming more flexible groups to make products, breaking up existing rigidity,” says Jeroen Bergmann, an associate professor of engineering science at the University of Oxford.

Another effect could be an emphasis on resilience in supply chains and production. Supply chains in the UK have often been optimised for efficiency and cost – such as sourcing component parts for electric equipment from abroad because it works out cheaper.

“This whole episode will lead a lot of organisations to question the wisdom of complex interdependent supply chains,” says Nick Oliver, a professor of management at the University of Edinburgh’s Business School. “It’s similar to how the supermarkets ran out of food but the corner shops didn’t.”

UK Prime Minister Boris Johnson, health secretary Hancock and other British politicians have referred to the current state of affairs as a “wartime footing”.

“In the 1930s, the British government was making detailed plans for ramping up the production of armaments and that just isn’t the case in this scenario,” says David Edgerton, an historian at King’s College London. “They didn’t see the need for tests on a large scale, nor did they anticipate the need for ventilators, even though they were warned that this was happening.”

“It’s interesting that people go straight to this war analogy,” says Edgerton. “But the reality is that you can only ramp up production of things that already exist.”

“The similarity [between the virus and World War II] is that there’s a clear need for switching priorities: the public takes precedence over everything else, which means overriding private interest,” says Mark Harrison, an economic historian formerly at the University of Warwick.

Data from Make UK shows that firms are unlikely to return to anything resembling normalcy soon. Remote working may become increasingly desirable, driving down demand for new cars but increasing pressure on computing infrastructure.

“Big crises like this have a tendency to disrupt established patterns and hasten new trends,” adds Coulter. “It may encourage reshoring because of problems with supply chains.”

However, reshoring rarely works exactly in reverse. “It doesn’t happen often that manufacturing is reshored in the same method as it was before,” says Jostein Hauge, a research associate at the Centre for Science, Technology and Innovation Policy at the University of Cambridge. Al Jazeera May 8

TOURISM: #1 British resorts brace themselves for a staycation stampede

The UK is set for a staycation boom once travel restrictions are eased, as Britons abandon hope of overseas travel this year, with industry bosses pinning their hopes on “rescuing the summer” with a surge in demand for domestic breaks.

Campsite owners are particularly hopeful of being able to open this summer, insisting their sites are already set up for social distancing. Hotels and B&Bs are likely to remain closed for longer.

Mike Bevens, managing director of Sawday’s, a Bristol-based travel outfit, said: “Ironically it may be that one of the key issues once lockdown is lifted is overcrowding at popular UK seaside resorts.

“Scotland reacted quickly to the virus, which means it has overall been less affected, and it offers wilderness.” he added.

The southwest of England is the most popular region for staycations, according to Visit Britain, attracting more than 19m tourists annually.

Corners of the country that have previously escaped the tourist hordes are also bracing themselves for an influx of day trippers and holidaymakers. Keith Beecham, head of Visit Jersey, said: . “We are very open and spacious, with very clean beaches, and have very strong public services.

“I think these are the sorts of things that people will be looking for post-crisis, rather than going for a break in a crowded city.” The Times May 10

#2 Travel meltdown — is this the end of the overseas summer holiday?

On a single weekend in July last year, a record two million Britons departed from airports in the UK. But now the industries that grew up to fuel our dreams of faraway places are running on empty. Any Briton brave enough to travel abroad this summer is likely to face two weeks of quarantine upon returning. The only thing spreading around the world is a lethal disease.

“The future at the moment looks so uncertain,” lamented Derek Moore, chairman of the Association of Independent Tour Operators. “We really don’t know where things are going to go.”

“People whose businesses have been running for 20-30 years are on the verge of shutting down,” warned Mark Tanzer, the chief executive of Abta, the UK trade association of travel agents. Airlines around the world are facing bankruptcy. Hotels have closed and many of them may not reopen. By the end of this year the industry is forecast to lose between 850 million and 1.1 billion tourists, with up to 120 million jobs at risk and a global loss of up to £970bn in export revenues from tourism. Quarantines are likely to accelerate the losses.

“Unless people are confident about the process of going through the airport and getting on an aircraft, then, really, what you’re saying is that aviation can’t restart until we get a vaccine,” said Tim Alderslade, Chief Executive of Airlines UK, representing British-registered carriers. “We’re talking about tens of thousands of jobs being lost in that scenario because demand will not just plummet but stay at rock bottom and that would be devastating for the sector.”

Yet all the evidence suggests tourists will not be alone in shunning air travel. Many big corporations will be cutting back on travel in favour of video-conferencing and its like. That may be why Warren Buffett, the Nebraska-based investor with a golden touch that has made him one of the world’s wealthiest men, dumped his airline stocks last month Sunday Times May 10

#3 Over-60s may not be able to holiday overseas for a year

Coronavirus could curtail the holiday plans of the over-60s for a year, experts warned, after travel insurers changed the wording of policies to exclude it.

Many firms stopped selling travel insurance in March as the pandemic took hold. The policies are now being reintroduced but with changed wording that specifically excludes claims relating to Covid-19 as it is now a “known event”.

This means that, despite travel agents reporting demand for holidays in 2021, any trips booked now are unlikely to be covered by insurance if the holidaymaker changes their mind.

Experts said this would be a particular problem for those over the age of 60 who are most at risk from the virus and most likely to decide to cancel if there was any kind of second wave. Daily Telegraph May 9

CYCLING REVOLUTION? #1 £2 billion package to create new era for cycling and walking .

Pop-up bike lanes with protected space for cycling, wider pavements, safer junctions, and cycle and bus-only corridors will be created in England within weeks as part of a £250 million emergency active travel fund – the first stage of a £2 billion investment, as part of the £5 billion in new funding announced for cycling and buses in February.

The government will fund and work with local authorities across the country to help make it easier for people to use bikes to get around – including Greater Manchester, which wants to create 150 miles of protected cycle track, and Transport for London, which plans a “bike Tube” network above Underground lines.

Fast-tracked statutory guidance, effective immediately, will tell councils to reallocate roadspace for significantly-increased numbers of cyclists and pedestrians. In towns and cities, some streets could become bike and bus-only while others remain available for motorists. More side streets could be closed to through traffic, to create low-traffic neighbourhoods and reduce rat-running while maintaining access for vehicles.

Vouchers will be issued for cycle repairs, to encourage people to get their old bikes out of the shed, and plans are being developed for greater provision of bike fixing facilities. Many more will take up the Cycle to Work scheme, which gives employees a discount on a new bike.

An updated Cycling and Walking Investment Strategy will be launched by the Prime Minister in the summer, with further measures to transform cycling and walking to deliver the government’s aims to double cycling and increase walking by 2025 – including:

– the creation of a national cycling and walking commissioner and inspectorate
– higher standards for permanent infrastructure across England
getting GPs to prescribe cycling and exercise
– creating a long-term budget for cycling and walking similar to what happens for roads

The government will also be launching a campaign to encourage more people to look at alternative ways to travel, to walk or get on a bike for their commute instead of public transport.

E-scooter trials will also be brought forward from next year to next month to help encourage more people off public transport and onto greener alternatives. Originally set to take place in 4 Future Transport Zones, the trials of rental e-scooters – which will now be offered to all local areas across the country – will allow government to assess the benefits of e-scooters as well as their impact on public space, with the potential to see rental vehicles on UK roads as early as June. UK Govt press release May 9

#2 Virus forcing more roadspace for cyclists/pedestrians across UK

The London mayor has signalled a long-term shift away from the car in the capital as research shows councils across the UK have introduced similar schemes.

Sadiq Khan said that a new programme of traffic-free roads, dedicated cycle lanes and wider pavements would be introduced to promote green travel.

However, it was announced that the temporary schemes would be reviewed and could be turned into a permanent feature. In the long term they could lead to a tenfold rise in cycling in London and a fivefold rise in walking, it was claimed.

It is likely that similar action will be taken across the country, where councils are increasingly looking to capitalise on a drop in vehicle use.

A new analysis published by Sustrans, the walking and cycling charity, showed that at least 30 separate schemes have been introduced by councils over the past month to give pedestrians and cyclists more road space.

“The capacity of our public transport will be dramatically reduced post-coronavirus as a result of the huge challenges we face around social distancing,” Mr Khan said. “By quickly and cheaply widening pavements, creating temporary cycle lanes and closing roads to through traffic we will enable millions more people to change the way they get around our city.” The Times 7 May

#3 Europe, US and Africa cities opt for cycle lanes, closing streets for recreation

Mayors from cities in Europe, the US and Africa have held talks to discuss initiatives designed to allow people to move around urban spaces safely in a world where physical distancing will be the norm for the foreseeable future – and do so without sparking a drastic increase in air pollution.

Some schemes: Milan has introduced one of Europe’s most ambitious cycling and walking schemes, with 22 miles of streets to be transformed over the summer.

In Paris, the mayor has allocated €300m for a network of cycle lanes, many of which will follow existing metro lines, to offer an alternative to public transport.

In Bogotá, the Colombian capital, a 75-mile network of streets usually turned over to bicycles one day a week will now be traffic-free all week, and a further 47 miles of bike lanes are being opened to reduce crowding on public transport and improve air quality.

New York has unveiled plans to open up 100 miles of streets for “socially responsible recreation” during the Covid-19 crisis, with a focus on areas with the most need, while Oakland, in California, is closing off 75 miles of its streets to passing cars and setting aside up to 10% of streets for recreation.

Mexico City is planning 80 miles of temporary bike lanes, and Barcelona is adding 30,000 square metres to its pedestrianised networks and 13 miles to the biking network. Guardian 1 May

UK to blame hard Brexit on COVID-19, warns EU trade chief

The UK is preparing to walk away from trade talks with the EU and blame the impasse on the coronavirus pandemic, EU Trade commissioner, Phil Hogan, has said

With only two more rounds of talks on a future trade and political agreement before a mid-June meeting between Prime Minister Boris Johnson and European Commission President Ursula von der Leyen, the EU has become increasingly exasperated by what they perceive as London’s lack of urgency in recent weeks.

“I think that the United Kingdom politicians and government have certainly decided that COVID is going to be blamed for all the fallout from Brexit and my perception of it is they don’t want to drag the negotiations out into 2021 because they can effectively blame COVID for everything,” Mr Hogan said.

The UK insists that it wants to broker a deal but that this will only be possible if Michel Barnier’s negotiating team drop their demands for regulatory alignment and for unchanged access to UK fishing waters.

London wants to agree a basic ‘no tariff, no quota’ free trade deal with the EU, alongside a series of sector-specific deals, to be agreed and ratified before December 2020, when its post-Brexit transition period is due to finish. However, the UK has yet to table formal negotiating texts in a number of areas, including fisheries.

UK officials have also hinted that trading with the EU on World Trade Organisation terms would give their economy ‘more flexibility’ to recover from the effects of the pandemic.

There is also the ongoing row over whether the Commission should be allowed to keep an EU delegation office in Northern Ireland after the transition period ends.

The UK has twice formally rejected a Commission plan to set up the office in Belfast to help oversee the implementation of the Northern Ireland protocol, with UK minister Penny Mordaunt telling Barnier and EU diplomatic service chief, Helga Schmid, that an EU office would be “divisive in political and community terms” in the province.

Following the last round of talks in April, Barnier insisted that the EU needs “clear evidence that the UK is advancing with procedures for new customs arrangements”. Euractiv May 8

British fish and chips shops rebounding with wartime spirit

Around 70 percent of the UK’s 10,500 fish and chips shops have reopened as owners find innovative new ways of doing business even before lockdown restrictions are eased.

Six weeks ago it was a different story. The UK fish and chip industry greeted the nation’s lockdown with as many as 80 percent of shop owners turning their window signs around to “closed.”

But not for the first time in the country’s history, necessity has become the mother of all invention, leading to something of a turnaround. Posters for fish and chips even invoke the wartime spirit.

One breakthrough for this traditional industry is a “click and collect” ordering system accessed online or through an app relying on the use of time slots for customers to collect their food.

Andrew Crook, President of the National Federation of Fish Fryers has his shop in Euxton Lancashire, which has streamlined the menu, and is one of those back in business, taking 80 percent of weekly turnover in just two days using click and collect.

“I had the busiest weekend I have ever had, I had 40 percent less staff and I had no queues,” he said.

By receiving orders days in advance, shop owners know how much fish and potatoes to prepare.

One issue that hasn’t been cleared up is that of prohibitive insurance coverage for delivery drivers. To get around this some fish and chip shops are using the services of local taxi firms who have seen business nosedive as the public has stayed home.

Chipper facts:

  • There are 10,500 fish and chip shops in the UK, outnumbering fast food outlets, including McDonald’s and Kentucky Fried Chicken.
  • Britons eat 382 million meals from fish and chip shops every year, including 167 million of just fish and chips. Total annual spend is £1.2 billion
  • 80 percent of people visit fish and chip shops at least once a year, and 22 percent every week IntraFish 5 May