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Jeremy's Blog 12th February 2021: Recovery and Change

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 11th February 2021.

Economic shocks, like the pandemic, both bring damage and precipitate change shaping a new economy, as energy, skills and assets find new opportunities, often with new technologies. Only hindsight might tell which was which, as it is easier to see losers than those building the future.

Accelerated change for physical retail, under long-run pressure and particularly burdened by business rates, sees talk of as many as a thousand shopping centres to be re-developed for housing, leisure and offices. England has acted with permitted development rights to ease such changes of use. Yet, it will not be just decline: perhaps some new security for the greengrocers, butchers and others reported to have gained trade and a shift from central locations. Other sectors rise as warehousing for internet suppliers booms.

With the changes seen to be coming for farming, there will be clients, often those long reliant on the taxpayer for income, who will have to look hard at where they want to be and review their options. Others, existing and new, will see opportunities to create the next generation’s businesses by being good at what they do, seeing where and how to achieve and hold a margin, looking at new enterprises whether adding value or environmental services. Where will profit and value lie? How do we manage that change as successfully as possible?

More generally, the government’s recovery and growth plan is due later this month. It seems likely to be entwined with climate change measures and the growing focus on the environment as part of the economy – a “green recovery”. It is not only government that is acting; investors and lenders are moving against firms and practices considered risks or damaging and might bring more money, innovation and pressure to these ends.

Very large changes are implied by the net zero and greater biodiversity goals, making it important not only to look at short-term issues, such as the EPC needed for letting now, but to appreciate the larger direction of travel. A net zero house, owner-occupied or let, is above Band A; renewables with time shifting of power will grow further; the electricity grid will need to be re-built to meet the new demand; peatland restored to reduce its emissions; farming required to resolve its slurry and related issues; land managed to sequester carbon and manage water …. and we see where and what food that the market wants to buy will be produced with which technologies. Such larger processes of change bring challenges, opportunities and work.

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