As I See It: Terry Murden
So, we’re only just over half way through the enforced shutdown and, who knows, it could go on beyond the new end date of 7 May. I suspect we’re in this for longer than the authorities are letting on, but by giving us a shorter deadline there is less chance of stirring panic.
Even so, businesses already close to the precipice will get more agitated, particularly as there is no guarantee they will see any of the financial support on offer much before June.
Calls for an exit strategy will grow louder and while the UK Cabinet remains firmly of a view that the stay-at-home policy must be given more time, there was a hint of the government’s thinking in Rishi Sunak’s latest statement last night on loan support.
A focus of business exasperation has been around the smaller and micro firms, particularly those limited companies with just one or two directors who pay themselves a dividend and feel they have been overlooked.
However, it is commonly assumed that there will be no mass return and that those who can work from home will be encouraged to continue doing so. That includes many of those micro businesses.
The Chancellor’s new package focused on the other end of the business spectrum – embracing more big companies which need workers to operate machinery. It appears he wants to ensure the country’s major manufacturers and construction companies are kept afloat and are ready to be first in line for a return to work. Already the HS2 rail project has been allowed to resume and a phased re-booting of other projects and factories must surely follow.
There is a reluctance to allow those customer-facing businesses such as bars, cafes and shops to re-open. Even in Italy and Spain, which have begun easing their restrictions, the hospitality sector will remain inactive. This is not surprising. Shops and bars welcome a constant flow of people, any one of whom could be carrying the virus. Factories, on the other hand, have a largely static population of workers.
One idea I proposed recently was to build temporary accommodation at large workplaces, even in factory and office car parks. This would allow workers who have been tested – and found negative – to return to work, but remain on site – a little like working on a remote construction site or mine. It would allow companies resume operations and employees to earn some money. I’ve since read that this is now happening in New York where operators of the state’s power grid have been camped out in parking lots adjacent to the plants and control rooms that must be staffed 24/7 in order to keep the city’s lights on. A group of Inverness care home workers are also living on site.
There is now talk of allowing people to return to work according to age. A briefing paper – The case for releasing the young from lockdown – by experts at the University of Warwick and Warwick Business School makes the case for releasing those aged 20-30 who do not live with older citizens.
Data from the Office of National Statistics and the Annual Population Survey suggest this could allow 4.2 million young adults to resume their daily lives.
Of those, 2.6 million work in the private sector and are more likely to lose their jobs or income during a prolonged lockdown. Releasing them to resume work would allow them to fulfil vital roles in the UK’s transport and delivery network, or open small businesses to stimulate the economy.
Andrew Oswald, Professor of Economics and Behavioural Science at the university, said severe damage is being done to the economy, future incomes, unemployment rates, levels of national debt..“before long, some balance will have to be struck.”
Nick Powdthavee, Professor of Behavioural Economics at Warwick Business School, spelled out the plain truth that “unless a vaccine is suddenly discovered there are no risk-free or painless ways forward” and while there would still be tragic cases and some pressure on the NHS by allowing people back to work, the effects would be far smaller than if the wider population were released.
Scotland’s First Minister Nicola Sturgeon said that a ‘framework’ to consider an exit strategy will be set out next week and maybe some of these ideas will be considered. After all, we are more or less at ground zero and we have to (re)start somewhere.
Whatever she comes up with, a return to work will be limited and Ms Sturgeon has to be careful that she does not raise expectations falsely after staying broadly in line, up to now, with the wider policy. As UK Health Secretary Matt Hancock says, the last thing we need is confusion over the message.