16 Sep 2020
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
It should hardly be a surprise that the risks from Covid-19 are increasing as we head into autumn since health professionals have been saying all summer that they would.
Yet that is exactly how it comes across when listening to our governments this past week. The new restrictions on household interaction come just as the gross domestic product figures released on Friday by the Office for National Statistics showed that the UK has still only recovered half of the economic activity lost in the spring.
In Scotland, we are told that a second national lockdown is still open for consideration but, even taking into account unprecedented business support, small and medium-sized businesses are already over-stretched. TheCityUK’s report on debt recapitalisation estimates SMEs (small and medium-sized enterprises) will be carrying as much as £100 billion of unsustainable loans by the spring when repayments are due to begin.
Those Scottish Government ministers who are inclined to say that we can always bring the economy back to life while we can’t do the same for people may also be underestimating just how much damage a collapsing economy does to public health. Health experts in Glasgow have spent the past three decades arguing with good cause how dramatically the entrenched poverty in the most disadvantaged communities of Glasgow has shortened lives. They gave it a name – the “Glasgow effect”. In Scotland’s biggest city we know only too well how difficult it can be to rebuild a stricken city economy, how long it takes, and that it is always the poorest who suffer most.
That is not to suggest that the pendulum isn’t swinging towards more targeted measures. The restrictions implemented across much of the Glasgow City Region focused on household interaction because that was what the evidence suggested was the source of an increasing Covid-19 case rate. Hospitality businesses stayed open with stringent but practical rules for collecting data to help test-and-trace systems work. That was a welcome judgment.
Even in the face of rising cases we therefore have to maintain our efforts to open up the economy. The aviation industry, for example, is buckling under the pressure of constant changes in a quarantine system that leaves passengers unwilling to take the travel risk. Attempts by the industry to persuade our governments to consider the role testing could play in reducing quarantine periods remain rejected while as many as 30 other countries have introduced it. Those countries will be ahead of us in the battle to secure the diminishing stock of aeroplanes that airlines will be operating as we try to restore those direct flights into markets which help make a region an attractive place to do business or to visit. The threat to the 5,000 jobs directly involved in operating Glasgow Airport alone surely deserves at least a hearing at both UK and Scottish governmental levels.
Equally in Scotland we have assumed that there is limited damage involved in keeping “non-essential” offices closed and retaining the home-working default. But we have no coordinated national measures in place to tackle the consequences for the thousands of citycentre jobs that depend on the commuter trade. The discussions between the Scottish Chambers of Commerce, trade unions and the Scottish Government on reopening “nonessential” offices therefore deserve to be a top priority.
The recent trend in cases proves that the virus is not going away any time soon. An effective vaccine is far from guaranteed and at best is many months away. We have to learn how to live with Covid-19 and rebuild our economy at the same time. A second national lockdown would show we have failed.
This article was first published in the Herald Scotland on 16 September 2020.