Lockdown-reflections at the end of week 63

Taken purely at face value, yesterday’s announcement that Portugal is moving from the green list to the amber list next Tuesday is of interest only to those in the UK who are actually there, are planning to go there or have an interest in properties or business there. Dig a bit deeper, and there’s a lot more to it than that.

The decision signals further difficulties for the travel industry which may in part explain the hints from Michael Gove during the week that the furlough scheme may be extended further into September. There will be calls for significant further help from that quarter. On the other hand, it represents a further boost to the domestic tourism and leisure sector which is, it seems, jumping out of lockdown with some vigour. So much so, indeed, that demand for workers increased in May at the fastest rate since 1997, tempered only by a marked lack of availability of people to take up the vacancies.

In taking the decision not only to move Portugal to amber but also not to grow the green list, the Government also seems to be signaling that it believes that its strategy to avoid significant bumps, delays or reversals along the way set out in its roadmaps includes tightening up on opportunities to import Covid cases or new variants. In doing so, it appears to have taken on board the effects of unrestricted overseas travel in February 2020 and last summer. The policy will still rely on people self-isolating when they get home where the evidence of a high level of compliance with the rules is not compelling.

We have also seen more stories on the news of people who have booked holidays in Portugal complaining that they will now have to cancel them because they will not be able to self-isolate on their return to the UK. Yet the events of last summer will have made it plain to those people before booking their holiday that changes in travel rules happen quickly, can be unpredictable and are a risk factor in the decision to book. Governments have faced a curious conundrum for a while, with many people demanding the freedom to make their own decisions and then blaming the Government when they go wrong. It seems to be fine for people to complain about the nanny state until something bad happens to them when the complaint turns to the nannying being inadequate.

The Government remains cagey about the 21st June. Cautious noises are being made about the growth in cases, but a Government which is understandably keen to open up as much as possible on the 21st appears to be waiting to see how those cases translate into hospitalisations and worse before making any firm decisions. Since there is evidence that vaccination reduces the impact of the virus in many who contract it, this has turned into a race to vaccinate as many as possible as quickly as possible. If the theory proves to be a sound one, there must still be a risk of delay in at least some parts of the roadmap if there is insufficient time to assess the relationship between virus spread, vaccinations and hospitalisations. I don’t envy the task of an allegedly notably indecisive Prime Minister on that one, especially as he watches the expensive wallpaper parting company with the Downing Street walls to the chagrin of the new Mrs J.

As readers of earlier editions of this column may recall, I have commented in the past on the economic success of international tech based companies during the pandemic and their tendency to pay underwhelming amounts of tax in a number of countries in which they trade whilst receiving, in some cases at least, assistance from the public purse in doing so. That assistance is not limited to direct subsidies and grants but will, for example in the UK, take the form of state benefits to low paid workers. It is interesting to see that one of the effects of a more internationally minded administration in the White House has been to create optimism that measures will be agreed between governments to make taxing large and agile international companies less like nailing jelly to a wall. One of the suggestions is an end to the unedifying race to the bottom between governments on corporation tax rates as they compete to attract international companies (a race in which the UK has been a full participant by the way) being spiked by an  agreed minimum level of corporation tax being set internationally. There is considerable optimism that agreement will be reached.

Notwithstanding all that, the sun has shone, there’s cricket (and rain) at Lord’s, which even non-cricket fans might enjoy as a sign of normality, and this week the dog and I have seen amidst the more usual fauna and flora a little owl (isn’t it great when the names given to birds and animals are so literal) and a buzzard being mobbed by crows, as well as the knobbly knees of several be-shorted golfers. Summer has arrived.

Enjoy your weekend.

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 at 07979 498817 or iwaine@prettys.co.uk.


Ian Waine
Senior Partner