Return to growth after the pandemic
Opening of the Building Societies Association (BSA) 2021 conference – the first time the event has taken place completely virtual – John Glen MP, Economic Secretary, HM Treasury, thanked staff for their hard work during the pandemic.
He praised not only the support in the form of postponing mortgages and keeping many branches open as a vital lifeline, but also in the individual, but no less significant, gestures that companies have taken to support their businesses. communities.
From the Leeds Building Society suspending arrears to a branch of the Principality Building Society marking 70 years of a lone customere anniversary – Glen thanked the workers for their innovative spirit.
There has, of course, been a lot of thinking about the challenges faced during, arguably, the most difficult year many players in the industry have ever faced. Indeed, in his opening speech, Mike Regnier, the current president of BSA, compared the experience to “hitting the right lane of the highway while changing the tires at the same time”.
He described the “ mortgage festival and famine ” – praising the way companies coped with the housing market shutdown before adjusting to the influx of demands created by the stamp duty holidays.
“We can and have handled the mortgage ‘famine and party’,” he said. “The pandemic has taught us one thing: the importance of household resilience.”
However, discussions quickly turned to how things might start to evolve in a new direction.
As such, several key themes emerged, including diversity and inclusion in the sector, the fight against the plight of mortgage prisoners, the repayment of the debt created by the pandemic and the corporate tax.
Inclusiveness and diversity
While many of these issues are expected to be discussed in more detail over the next four days of the conference, Glen – in a pre-recorded interview with Robin Fieth, chief executive of BSA – touched on how the topics might be addressed at the ‘to come up. .
Indeed, Glen said diversity and inclusion should be on everyone’s agenda and urged companies that had not yet signed the Women in Finance charter to do so. He said: “Each signing gives weight to the feeling that the tide is turning.”
Already 40% of senior executives in the construction industry are women, 8% more than the rest of the financial services industry.
But, he said, “I still think there is a strong case for participation.” This included encouraging diversity by signing the Race at Work charter, to improve equal opportunities in the workplace.
Mortgage prisoners are clearly set to remain a strong theme beyond the pandemic. Glen described tackling the problem as a tall order, admitting that there was no one-size-fits-all approach to addressing the many different situations these borrowers faced.
Fieth said it seemed likely that more types of prisoners would emerge – one group was those who were in one to four story clad buildings and therefore could not receive financial support for remedial work .
The other group were the small 1% to 2% of mortgage borrowers who were in serious financial difficulty and whose credit was compromised due to the pandemic and who would need support.
Glen also hinted that the government could make a corporate tax announcement in the next budget. He said the government is reviewing the appropriate level of surcharge and working with stakeholders to ensure it provides clarification in this area.
Economist, writer and broadcaster Linda Yueh also spoke to conference delegates about how she believed the UK economy could emerge from the Covid pandemic.
The key, she said, would be employment – ultimately: how many people have left the workforce and how quickly they can return to work. Inflation, she said, remained uncertain and interest rates would remain low until economies were “on a more solid footing” until employment returned to higher levels. .
Yueh believes that public sector investment – especially in green projects – would help boost the economy he needs. Harnessing some of the positive aspects of foreclosure – for example, working from home – would also provide opportunities for businesses and organizations to support employees.
She said the UK could shift towards faster, fairer and greener growth. Now is the time for a big reset, she concluded.