07 Jul 2021
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
Last week the job retention scheme began its gradual winding down, with no sign of the Chancellor changing his mind this time on calls for its extension.
On Monday the Prime Minister announced his government’s preference for a comprehensive removal of legal restrictions in England on July 19.
We obviously cannot declare the pandemic over, but it would appear where a country’s vaccination programme is well advanced governmental responses are becoming less severe.
The UK Government’s final decision will be made next Monday but if they follow the Prime Minister’s roadmap then England will have seen the last of social distancing, capacity constraints, mandatory mask wearing and the home working default.
Nightclubs, theatres, music venues and sports stadia will return to normal. Businesses that have had no choice but to accumulate debt to survive will, at last, be able to begin repairing their lop-sided balance sheets. We can also expect the furlough scheme to finish as planned at the end of September.
The transfer of responsibility for managing the risk of contracting Covid-19 is beginning to move from the government back to society.
However businesses in Glasgow and elsewhere north of the border must await similar decisions from Holyrood and do so in a more challenging environment with Scotland experiencing amongst the highest case numbers in Europe.
There will be a familiar desire for the Scottish Government to be more cautious. Plenty of voices are ready to describe the UK Government’s approach as ‘reckless’.
Not every measure the Scottish Government may choose to retain will come free of economic harm. Whilst guidance urging mask wearing on public transport or in shops is unlikely to be a major concern, there will be more anxiety if the government chooses to stick with the home working default.
Glasgow city centre is especially vulnerable if the return to the office is further delayed with at least 30,000 jobs depending in part on the footfall from the 120,000 people who commuted into their offices during the working week before the pandemic.
Some might argue that those workers are never coming back. There are plenty of reports backing up the EY 2021 Work Reimagined Employee Survey which found that nine out of ten respondents wanted flexibility on where and when they work with the average employee preferring to operate between two and three days online. Employers legally must listen to flexibility requests but there will be several reasons, including the training of young and new employees, why not every such request will be accepted. There is also evidence that home workers have experienced increases in both stress and the hours they have found themselves working. We won’t know the scale of the change until the home working default is brought to an end and even then, new patterns may not endure. But it is time to find out.
Otherwise, a decision to retain the home working default may force many of those footfall dependent businesses to make their own decisions. The JRS will only have seven weeks to run after Scotland’s own “Freedom Day” on August 9. If there is little chance of customers returning before the end of the furlough scheme it would be no surprise if some owners decided to call it a day.
The Scottish Government was very clear last December in its strategic framework for handling the coronavirus crisis that ‘the longer restrictions continue the less resilient businesses will become’.
With the success of the vaccination programme and an opportunity to use the summer as the most benign season to reopen surely the time has come to take economic harms to heart.
This article was first published in The Herald on Wednesday 7 July 2021
