Lockdown – Reflections at the end of week 18
My experiences this week have emphasized to me two aspects in particular of the current point in our collective journey through the lockdown period. The first is that, for many who still have a job or who own a business which is able to trade with limited impact from the effects of lockdown, it feels like a period of phony war. Against the gathering clouds of an economic slump of serious proportions, sections of the housing market have become highly competitive, overseas holidays are being booked and taken and the price that people are prepared to pay for a puppy has steepled so sharply that boarding kennels and dogs in back gardens are being targeted by thieves. This cannot be attributed entirely to denial or to a bulldog spirit of carrying on regardless. A witness to one of the Asian tsunamis once told me that he could see the wave coming from a long way off and there was a clear sense that it was not a usual wave, but there could be no understanding of how devastating it could be until it had actually made landfall. I cannot help but feel that we’re in a similar situation. The second is that, by contrast, for those whom the wave has already hit, life is tough and shows no immediate signs of getting better. We have heard this week that the Chancellor has drawn the line at extending the help which the government has provided to self-employed people to the large number of people who, although severely impacted by the effects of lockdown restrictions on their earnings, have not qualified for self-employed support schemes, a decision which, whilst understandable in the difficult area of deciding where to spend finite resources, has caused real pain and a sense of unfairness.
We have seen this week, in the form of the Prime Minister’s visit to Scotland, a demonstration of the political concern which has been created by a less predicted effect of Covid-19 in the United Kingdom, namely a rise in support for Scottish independence as differences in the handling of the implications of the virus on either side of the border have put the union under strain. In the last general election, the current government received significant support from voters in regions including, for example, many parts of the north of England who had, over a number of years, come to feel a sense of disenfranchisement as the south east prospered economically and whilst they continued to struggle to recover from the loss of the mining and manufacturing industries which had been their economic bedrock for so many years. It seems likely that the economy in those post- industrial areas will suffer more than many other regions in the months and years to come, and that, with the Chancellor hinting at a return to cuts and austerity measures this week, it will be challenging to government to deliver the levels of economic help to those regions which were suggested during the election campaign.
In an economy of such contrasts, it becomes a hugely important role of government to retain social cohesion and a sense of fair treatment. The risk, where no political outlet exists as it does in Scotland, is a further feeling of disenfranchisement which can open the door to political extremism and to the riots and the loss to a whole generation to expectations of employment in some places that we saw in the 1970’s and early 1980’s. This can only be solved with a coherent, considered and deliverable national strategy for economic support, investment and growth. In a week when the government has been heavily criticised for what a parliamentary committee found to be a late, ad hoc and inconsistent approach to the early stages of the impact of the Covid virus and Brexit negotiations appear to be stalling, that strategy needs to be developed and implemented quickly to the benefit of all of us.
Ian Waine leads Prettys’ Corporate Services Team and has advised on a large number of corporate recovery and corporate restructuring cases over the last 30 years. He can be contacted on 07979 498817 or email@example.com.