Money&Co chief Nicola Horlick has called for the government to invest in construction and manufacturing in order to avoid an economic depression in the wake of the pandemic.
The International Monetary Fund has predicted that the world economy will decline by three per cent as a result of the Covid-19 crisis, which compares to a decline of only 0.1 per cent in 2008 as a result of the financial crisis.
Horlick (pictured) said in efforts to avoid a depression, the government should implement a 10-year plan for the renewal of the economy and fix some of the issues that were there prior to the pandemic.
“Whilst we are still battling against Covid-19, we need to be thinking about how we can avoid a depression and what each individual, company and government can do to contribute to the effort to bring growth back to the world economy,” Horlick said in an article on LinkedIn.
Horlick said construction needs to be reshaped, with the nation facing a lack of skilled traders, and affordable housing.
She said the government must invest in building skills post Covid-19, establishing specialist construction colleges to train electricians, plasterers, plumbers and tilers, with proper regulation and oversight of these trades to ensure that the highest standards are achieved and maintained.
“It won’t take long to train a new generation of tradesmen and then we can put them to work initially on sorting out the housing shortage,” Horlick said.
Horlick said manufacturing, which used to be the focus of the economy, must play a vital role in the recovery.
“As George Osborne argued, we do need to rebalance our economy and bring manufacturing back to the UK,” she said.
“The Covid-19 crisis is an opportunity to start that process and the government should make equity investment available in order to assist with this.”
Horlick said small businesses suffering from Covid-19 need equity and the best way to encourage equity investment into these companies is to provide tax incentives to individuals.
She said the government needs to immediately relax the rules on what companies qualify for the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) investment and should also make the tax relief for investors more attractive, with 75 per cent tax relief for SEIS investors and 50 per cent tax relief to EIS investors for the next couple of years.
“This will unlock investment from wealthy individuals,” Horlick said.
Furthermore, Horlick said after the government insisted there will be no extension to the Brexit transition period, a Brexit deal must be struck by October in order to avoid a further heavy blow to the economy.
“In the current circumstances, it would be crazy to terminate our relationship with the European Union without a deal at the end of this year,” Horlick said.