Spending Review and new tiers: reaction

Jo Francis
Thursday, November 26, 2020

A large UK paper and packaging group has called for the government to match German levels of ambition on sustainability following yesterday’s Spending Review, while BPIF CEO Charles Jarrold has warned that the new system of tiers will continue to dampen demand for print.

Most of England falls under Tier 2
Most of England falls under Tier 2

Chancellor Rishi Sunak announced a wide-ranging Spending Review yesterday (25 November), including details about the dire state of the economy which is expected to contract by 11.3% this year, described as “the largest fall for 300 years”.

Borrowing is forecast to reach £395bn, or 18% of GDP, this year.

Some 2.6m people are likely to be out of work by next spring, with output unlikely to return to pre-pandemic levels until the last quarter of 2022.

BPIF chief executive Charles Jarrold commented: “We kind of knew how bad it was and there is no point glossing over the fact that public sector debt has risen hugely and the economic hit is significant.

“The real challenge is how do we support growth in the economy. We will continue to work with government to see how they can support productive investment in our sector so that we can get growth, because ultimately we will only address all the issues that we will face through growth.”

Jarrold said that the new system of local restriction tiers confirmed today, with only the Isle of Wight, Cornwall and the Isles of Scilly in ‘Tier 1: medium alert’ and large swathes of England subject to ‘Tier 3: very high alert’, would continue to hold back the industry.

“I think the tiers is further confirmation that it’s going to be a long haul out of this, and it will continue to dampen demand.

“There’s a real appetite from our members to try and get going again, but the reality is significant parts of the client base are closed or restricted by government mandate.”

Separately, DS Smith chief executive Miles Roberts has called for the government to be more ambitious and provide extra support around its plans for green recovery.

He said: “Building back better is the only way to approach spending post Covid-19, and we are pleased to see the Spending Review and the Prime Minister’s 10 point plan focus on green recovery - particularly the launch of the long awaited National Infrastructure Strategy and the R&D Strategy. While these are a good starting point, we are concerned that the money committed is not enough to achieve the government’s ambitious objectives. 

“A specific area of concern for us is the Government’s support for decarbonising heat intensive industries. Last week, the Prime Minister announced a £500m commitment for hydrogen and low carbon initiatives. This is only a fraction of the German government’s recently announced hydrogen investment of €9bn (£8bn), and the Spending Review has not committed to more. We would like to see the UK government matching and exceeding the German level of ambition and investment.

“Businesses like ours are committed to bringing about sustainable change, but we can only do so much without the right levels of support,” he added.

DS Smith has sales of more than £6bn and operates across the UK, continental Europe, Russia, Africa and the USA. 

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