
As I See It: Terry Murden
Not so long ago hospitality companies were having a duck-fit over Brexit plans that threatened to restrict their ability to hire immigrant labour. How quickly sentiment can change.
The Spaniards, Latvians and other foreign workers at the Coylumbridge Hotel in Aviemore may have been reminded of this when they were told on Friday they were not only losing their jobs (arguably excusable given the government’s shutdown order), but they were also made homeless by being thrown out of their accommodation. Suddenly, according to a letter they each received, they were “no longer required”. Persona non grata.
These are difficult times for us all, but the hospitality and leisure sector, the backbone of the important services sector, is taking an immediate and crushing hit that requires everyone to pull together, rather than behave with such brutality.
Events in Aviemore expose the commercial and human effects of the coronavirus while government promises to keep people in work take time to come through and on which the weight of expectation now rests.
UK Hospitality, the trade body, has estimated that the Covid-19 outbreak in the UK has already cost the hospitality and leisure industry thousands of jobs. Early estimates that half a million have gone could be revised now that the taxpayer will be paying 80% of wages, but undoubtedly there be some shrinkage.
Governments and local authorities are also helping by temporarily relaxing a number of restrictions. This includes allowing pubs and restaurants to operate as takeaways without needing to apply for change of use.
But the severity of the disruption across the whole economy should not be underestimated. Normality has been put on hold.
This has been described as akin to wartime conditions, in which case we are still in the phoney war stage (war declared but not much visible change). Boris Johnson’s claim that the virus will peak in 12 weeks, hinting at a quick return to life as we knew it, evokes talk at the outbreak of World War One that it would all be over by Christmas. We all know how that turned out.

Many are taking “normality” literally and getting on with life as if nothing has changed, still going to the pub, some even holding “quarantine parties”, and one group of revellers photographed in the street shouting “coronavirus” instead of “cheese” as if the whole thing is a bit of a joke.
Their view is that it is a risk worth taking and that the whole thing is being over-stated. Indeed, there is evidence to support this argument. Bird flu did not kill the predicted millions in 1997. Two years later it was Mad Cow Disease and its human variant, vCJD, which was forecast to wipe out half a million. In fact, fewer than 200 died from it in the UK. There were predictions that the Sars outbreak of 2003 would kill tens of millions. In 2009, it was the turn of swine flu, with warnings it could kill 65,000.
So, should we just “Keep calm and carry on”? Even in the war, with the bombs falling and people dying, the shops, pubs and cinemas stayed open, sport was played and movies were made. The big difference this time, of course, is that social contact introduces us to what is an invisible enemy. Technology, and the option for operating remotely, has never been more important in ensuring the global economy continues to function.
Yet there is a view, expressed by our columnist Steve Sampson and the writer Peter Hitchens, that we should not be clearing the streets; that rather than shut down we should indeed just carry on, suffer the effects of the illness, and continue to work. This would have the added advantage of building immunity if Covid-19 reappears. The argument is that disease and death are things we have to accept, and that sometimes, like in wartime, we just have to “get through”.
The alternative – a hollowed out world economy and millions out of work through the collapse of companies – does not bear thinking about. The costs of propping up the economy are unrealistic, making Jeremy Corbyn’s multi-billion election manifesto pledges look like a modest outlay.
In the US, the forthcoming weekly jobless claims are expected to be worse that the depths of the financial crisis and the early-1980s recession. While the headline unemployment rate is unlikely to touch the 24.9% experienced during the Great Depression, it could be the highest in almost 40 years, something no one could have predicted just last month in a jobs market that had been firing on all cylinders. Analysts say job losses will be counted not in the thousands or even hundreds of thousands, but in the millions.
Will the UK and Europe suffer the same outcome? There is a risk that the estimates of commercial gloom are being exaggerated. However, economists say there is a strong likelihood that there will be more company failures than deaths. Omar Hassan, an economic development specialist, says coronavirus’s economic danger is “exponentially greater” than its health risks to the public.
“If the virus does directly affect your life, it is most likely to be through stopping you going to work, forcing your employer to make you redundant, or bankrupting your business,” he says.
As we prepare for a lockdown, and the rate of deaths in lockdown countries such as Italy and Spain continues to rise, we must hope the authorities have called it right.
We have to be ready for economic armageddon. Yes, it could be that bad. The consultancy Capital Economics estimates a 15% to 20% drop in output in the second quarter of 2020.
If the combination of social restrictions and financial stimulus pays off then we could settle for a “new normal”, a smaller, highly-indebted and different kind of economy built on virtual trading, changed priorities, more remote working and smaller businesses that we have yet to understand but will learn to accept.
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