20 May 2020
By Stuart Patrick, chief executive of Glasgow Chamber of Commerce
The language used to characterise the business community’s current struggle to navigate this crisis sometimes needs a check.
In these pages Herald business editor Ian McConnell justifiably skewered a ‘senior UK government source’ for expressing a view that some businesses were ‘addicted’ to the Job Retention Scheme (JRS).
The absolute bone-headed insensitivity of that comment, while so many companies are essentially barred from operating, nearly had my iPad bouncing off the wall. Fortunately, Chancellor Rishi Sunak promptly disowned the remark, saying that ‘nobody who is on the furlough scheme wants to be on this scheme’.
The closure of businesses is not the fault of the staff nor of the owners. I do hope the senior government source was subsequently sent on work experience with a small business that has managed to keep operating.
I have another phrase I would like to see chased away. The idea that companies are being ‘bailed out’ by either the UK or Scottish Government is just as annoying.
I can accept that a business struggling in more normal times to deal with current market trends, bad management practices or new technology and which government has decided needs saved for wider social or economic reasons could indeed have been ‘bailed out’. No doubt in the midst of this crisis there are some businesses in poor condition before the lockdown and which are now holding off the final reckoning with some government support. But they are the exceptions.
Most businesses receiving financial support are getting those funds because government has either told them they cannot operate or because their markets have been drastically curtailed by government actions needed to tackle the public health threat.
They were previously perfectly robust, come in all shapes and sizes and have had absolutely no choice but to draw on the JRS, Small Business Grants or the other more sector specific interventions to keep going.
Admittedly it is media publications from the FT to the Guardian that most regularly use ‘bail out’ in their news pages and not, so far, senior government sources. Both the UK and Scottish Governments have acknowledged that businesses are, by and large, needing support through no fault of their own and can hardly be criticised for being unprepared for an economic catastrophe that is so unprecedented that the Bank of England has gone back 300 years to find a comparable slump.
It is also a relief that neither government has chosen to attach conditions to that support. Even the JRS does not require businesses to commit to holding on to furloughed staff when the scheme finally ends. That was certainly being considered but wise heads appreciated that would have led to many companies deciding to opt for early redundancies.
There are many who would have preferred to see financial support tied to other worthwhile outcomes - a commitment to greener business practices, or better staff rewards. After all isn’t that what a ‘bail out’ implies. If a business is getting government support shouldn’t government be getting something in return.
That view misunderstands this currently drastic situation. Both the UK and Scottish governments have shown how extensive their powers are to intervene in an emergency.
Shutting down markets to achieve a public health objective is not the time to be pursuing other objectives, however attractive they might be. Any government that used the emergency to force through unrelated policies would likely risk antagonising businesses, when winning arguments on their merits might succeed once the crisis is over.
Both UK and Scottish governments are to be congratulated for avoiding the ‘bail out’ terminology and the attitude that goes with it.
This article first appeared in Glasgow Chamber’s weekly column in the Herald newspaper on May 20
