AS I SEE IT: TERRY MURDEN says companies are being asked to stay open with no guarantee of customers or financial support
‘Although it is guidance, please do not think of it as optional,’ stated Nicola Sturgeon when she declared the latest round of restrictions to tackle the spread of Omicron. It’s a lovely piece of linguistic gymnastics. If it is not optional, then it must be pretty close to mandatory. And if it’s mandatory then it is no longer guidance.
The FM’s preferred response is to impose tougher restrictions, but without the money to back her plans businesses are not under instruction to do anything other than impose ‘reasonable measures’ to keep customers and employees safe.
It was bad enough trying to define the new rules and legislation that were brought in earlier in the pandemic. Now businesses are being asked to effectively decide for themselves what to do, with no back-up if things get hairy.
All of this effectively leaves business worse off than if there were strict orders for a shut down – a proper stay at home, lock your doors and don’t move sort of closure that we all understood at the beginning of the crisis.
At least that enabled business to make claims for losses of revenue and employees for loss of earnings. Now businesses have to remain open and hope they will continue to get customers but with no guarantee (yet) of any financial support from the government if they don’t.
The penny must have dropped in official circles that this is an untenable situation, with the hospitality sector alone already suffering eye-watering sums in lost business through cancellations, unsold stock and wages for staff who may or may not be needed. Businesses are asked to introduce ‘reasonable measures’ to handle this confused state of affairs. The government should heed its own advice and give firms clarity one way or another.
The Chancellor has now cut short an ill-timed business trip to California to deal with growing calls for more support, even another round of furlough. So far he has claimed there is money still available, but he is not fooling the rest of us.
Of course, the real reason he has resisted issuing orders to close down the economy is that he would be forced to introduce those same measures that have already seen the national debt rocket. The thought of adding to it is scaring even the most profligate of mandarins in Whitehall.
In the end he will have little choice but to raid the Treasury’s already stripped-to-the-bones coffers. But he’ll run into more problems with business if he offers – as seems likely – more loans to firms which are already hugely indebted and will be paying higher interest payments thanks to the decision of the Bank of England to hike the base rate.
Support has to be through the tax system – including VAT and business rates – and it will need to be better targeted so that the most exposed are given priority.
tmurden@dailybusinessgroup.co.uk
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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