Return to economic health unlikely amid lockdown uncertainty

Business

For employers and employees these are challenging and confusing days.

Challenging because the UK is on the brink of an historic recession. Thousands of business owners are uncertain of their future viability, and more than nine million workers are wondering if they will be among the millions left unemployed when the government stops paying their wages.

And confusing because the path out of lockdown remains unclear. The direction of travel has been breezily set by the prime minister but the detail has not, leaving businesses and their staff guessing at what the near future holds.

At the heart of the latest uncertainty are mixed messages from ministers and the government over face coverings, and the need to return to work.

For the month since the reopening of non-essential retail, ministers have been urging people to get out and spend.

Chancellor Rishi Sunak has been to the fore, asking people to “eat out to help out” and serving up discounted dinners, unmasked, in publicity shoots.

The latest step in this easing of lockdown came in England on Monday with the reopening of beauty parlours and spas.

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“Reopen the pores to reopen the economy”, as Mr Sunak’s team might have put it.

In Scotland, shopping centres were able to open again while in Wales outdoor restaurants and pub gardens welcomed their first customers in months, as did museums and indoor attractions.

But the steps served to highlight the lack of clarity over face coverings. The prime minister said he thinks they should be worn in shops and enclosed spaces as “insurance”, and hinted it could become mandatory in England.

In Scotland it already is, and across business there is a hope that the measure, once universal, will help rebuild fragile consumer confidence.

Boris Johnson also says he wants people working at home to return to their offices if they can safely do so.

The aim, as with his chancellor, is to try and encourage people back not just to their workplace, but to the businesses they support, the cobblers, bars and sandwich shops dependent on footfall to city and town centres.

These messages are at odds however with the fundamental advice of his government.

Visit the COVID-19 guidelines pages on gov.uk and you are presented with five clear messages: stay at home as much as possible; work from home if you can; limit contact with other people; keep your distance from people not in your household; wash your hands regularly.

The disconnect between the two is clear. Mr Johnson plainly wants to send a different message, and may reason that people will listen to what they say rather than official guidance.

But it is perhaps no surprise that the public are at best cautious given the unambiguous message about the deadly impact of coronavirus they have been urged to follow for months.

And cautious they certainly are. While football in shopping centres and on high streets is recovering it is still no more than 50% of the levels a year ago and many hospitality businesses remain closed, unconvinced there will be the trade to sustain their overheads.

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And there is another barrier to recovery. Coronavirus has given employers and employees a glimpse of new ways of operating.

Staff may miss their colleagues but they do not miss commuting, and have proved productive working from home.

And companies looking to cut overheads to recover will wonder if maintaining desk space in premium city centre properties is the best use of resources.

Exiting lockdown was always going to be harder than imposing it, and changing behaviour is not an exact science. But without clarity of message it will be even harder to deliver a return to economic health.

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