For the UK to have a vibrant functioning economy post-crisis Government needs to take a more creative approach to lockdown
If the Government wants the UK to have a vibrant economy after this crisis then it needs to abandon its one-size-fits-all lockdown strategy and adopt a more enlightened approach to industry engagement, warns Lawrence Barton, Managing Director of GB Training Group.
This Sunday Boris Johnson will unveil his much-anticipated roadmap to resuscitate the British economy and lift us out of lockdown. Ensuring public safety and saving lives is paramount, but so too is the need to reduce unnecessary collateral damage inflicted upon our economy.
The devastation is unprecedented in its scale and uneven in its impact. The hospitality sector, for example, is among those most exposed. It accounts for upwards of 3 million jobs and includes over 100,000 pubs, bars, clubs and restaurants. The need for social distancing to reduce the rate of infection across the population means the sector is likely to be among the last to be freed from lockdown. The looming reality of thousands of businesses in the sector going bankrupt is ever-present. There are unlikely to be many words of comfort business owners and furloughed staff working in the sector will be able to take from the Prime Minister this weekend.
The much needed one size fits all support measures the Government introduced at the start of the crisis to deal with the immediate trauma now needs to be overhauled and replaced with packages tailored to address the nuanced challenges each industry faces.
#NationalTimeOut Campaign
One such initiative put forward by Jonathan Downey, the businessman behind London street food business Street Feast and the Milk & Honey cocktail bar in Soho is gaining traction within the hospitality industry. The #NationalTimeOut campaign is calling for the introduction of new legislation to enable commercial landlords and hospitality tenants to work together to shape and create a national solution to the imminent prospect of thousands of empty premises.
The proposal hinges on a nine-month national payment pause — a #NationalRentFree period granted to both parties: business tenants and commercial landlords. A period of payment postponement when commercial rents together with debt and interest payments secured on those premises are pushed to the back end of leases and loan terms. To make up this rent-free period, each lease could be extended by nine months at the landlord's discretion so that those payments aren't lost, but rather deferred to the end of the lease. The proposed measures are intended to be specifically targeted at the hospitality and leisure sectors that have been forced to close and remain closed by government order. It's suggested the measures could be accompanied by other provisions, such as a 12-month business rates break exclusive to a limited number of target industries.
Those behind the campaign argue that failure on the part of government to act effectively risks more than half of all hospitality venues and as many as 2 million jobs being lost before lockdown is out.
An new approach
Tailored legislation and sector-specific economic support packages are one thing. Another is just plain pragmatism. The Government needs to be more open and engaging with industry regarding the different options it's considering for how to lift specific lockdown restrictions. This will afford businesses the chance to prepare for whatever option is chosen. The Prime Minister's speech this weekend promises some insight, but the perception is there is unlikely to be sufficiently detailed roadmaps for individual industries.
This needn't be the case. Just as we've learnt lessons from other countries in terms of best practice to slow the spread of coronavirus, so too can we embrace solutions to help breathe life into areas of the economy, so they have some limited function. In Switzerland, for example, the authorities have signalled to industry their openness to creative solutions to alleviate the burden on particular industries.
The Financial Times recently reported that GastroSuisse — the country's influential lobbying trade association for the restaurant and bar industry — has submitted detailed proposals to the government to allow trading to resume in some capacity. They include the use of temporary side "serving tables" on which waiting staff could leave drinks and food without needing to lean over or come near customers.
In Lithuania authorities have announced plans to offer a vital lifeline to cafes, bars and restaurants in the capital, Vilnius, by transforming the city into a vast open-air cafe by turning over swathes of public space so they can put their tables outdoors and still observe physical distancing rules.
Sensible pragmatic solutions such as these should be introduced here too. Nightclub venues, for example, which typically have significant square footage and multiple entrances and facilities have the capacity to be adapted to serve alternative hospitality functions, while also adhering to existing social distancing requirements.
It's time for the Government to abandon its binary approach to restrictions and take a more enlightened approach to its engagement with business. Failure to do so will leave it saddled with an economic crisis with implications even more reaching than the virus itself.
