26 May 2021
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
There is a palpable sense and an increasingly vocal expression of the injustice Glasgow business owners and managers feel because they are trapped in Level 3 - with local authority travel restrictions increasing the economic damage.
Many businesses allowed to reopen in late April have seen their trade collapse. It’s not uncommon for individual small businesses to have lost between half and four fifths of the custom they previously managed to rebuild.
Quite simply that is because many Glasgow businesses - especially those in the city centre – are designed to serve a metropolitan economy. When you cut off access from surrounding affluent local authority areas such as East Dunbartonshire and East Renfrewshire their business model no longer functions.
Glasgow is now one of the very few geographies in the UK that is having to deal with local travel bans, but there has been no corresponding meaningful adjustment to the financial support affected businesses are receiving. In fact the support is less than we assumed from announcements made by the First Minister.
When the Scottish Government promised to provide business with further grants the maximum amount any business could get was £750 for each week restrictions are in place, but I have repeatedly pointed out these grants fall far short of covering the losses SME owners have been sustaining.
The truth is most businesses won’t even be getting that £750 - because they were allowed to open in April they will receive a restricted grant after being no longer designated as closed businesses. The amount due for many is about two-thirds of the maximum, with figures Glasgow Chamber has seen suggesting that almost 90% of Glasgow businesses will get less than the quoted £750 maximum.
This may all appear logical and consistent from a bureaucratic perspective but it comes as no surprise to find it inspires nothing short of derision from the business community. The financial support offered bears no relationship to the economic damage now being done by restrictions.
In considering this further I was prompted by a colleague who asked what had happened to the four harms the Scottish Government set out back in December last year as guides to the appropriateness of the measures they were taking. I had a look at the current visual summary of those harms on the government website. We are now very familiar with the detailed indicators of health impacts - R number, new cases, hospital admissions and so on.
Indirect health impacts and societal impacts also have relatively current measures ranging from A&E attendances and emergency hospital admissions through to pupil school attendance, recorded crime and crisis grant applications.
There are four indicators for economic impacts and the choice helps to explain why economic issues appear to be so rarely mentioned. Gross domestic product is very high level and the most recent assessment was in February. Both unemployment and claimant count are hardly ideal when the Job Retention Scheme is still effectively protecting jobs. That leaves a monthly business turnover index with the most recent figures being in March.
Where are the accepted real time measures like mobile phone footfall data or sectoral performance such as hotel occupancy rates? Where is data on business debt or business owner mental health?
So answering the question whether costs of lockdowns are now outweighing the benefits is hard for the Government to tackle if the economic costs are barely assessed.
The evidence we see from our members suggests that Professor Devi Sridhar is right in arguing this week that ‘we have to move away from harsh restrictions and lockdowns to data driven, precise outbreak management’.
This article was first published in The Herald on Wednesday 26 May 2021
