Kristy Dorsey: Why blanket rules are hampering Scotland's economic recovery

Parents and students are in dismay about the future of education, with conflicting guidance on what form “school” in Scotland will take come August. The number of people on furlough across the UK has topped nine million – more than one-quarter of the workforce – with serious question marks over what their future holds as Government support schemes start to wind down. Some businesses are starting to slowly emerge from hibernation, but many others have yet to begin their journey out of lockdown.

You could hear the collective groan of dismay on Thursday from hundreds of Scottish pub and restaurant owners who had been prepping their al fresco facilities in anticipation of welcoming customers in this weekend for the first time in months. Led to believe that those with outdoor seating would be included in the second phase of loosening lockdown restrictions, they no doubt felt the rug had been pulled out from under them when the First Minister instead said that a decision on their return will be delayed until July 2.

Whether this will have any knock-on effect on the reopening of indoor areas, which was tentatively set for July 15, remains to be seen. Also under review at both Scottish and UK level is the Government’s two-metre distancing rule which many venue owners have said will cut their capacity to a degree that their businesses will no longer be viable.

Boris Johnson has suggested there is “margin for manoeuvre” over the application of the two-metre rule in England while in Scotland, Nicola Sturgeon has said that reducing distancing requirements will require “rigorous consideration and appropriate assurance”. A further announcement on this from the First Minister is expected on July 2, until when the two-metre rule remains strictly in force.

Shortening the distancing rules would be welcome news for the 87% of Scottish pubs which said in a survey earlier this week that two metres would force them to close, but the dangling of this possibility also makes it difficult to plan for reopening. Layouts and space requirements will differ depending on whether distancing is set at one or one-and-a-half metres, both of which were mentioned as possibilities by the First Minister. As for those who have already reconfigured their premises in preparation for reopening, they would be out of pocket for the cost of implementing social distancing measures that no longer apply and have reduced their capacity by more than necessary.

All of this is of similar pertinence to the “non-essential” retailers in Scotland which also thought they would also be open this weekend, but have been told to wait until June 29. They are to use the time between now and then to “ensure that plans for the responsible use of public space are in place”, yet will be opening before any decision has been made on whether two metres is a “responsible” distance.

It’s yet another barrier to the urgent task at hand, which is to restore spending and earning. Consumer behaviour will be key as this economic drama unfolds in the coming months, and it remains to be seen how much appetite persists between the fright of infection and anxieties over employment. Have fears inflated to such a level that no-one dare returns to normality?

There is no disputing that the numbers on the economic front are scary. The Office for National Statistics revealed on Tuesday that Scotland’s unemployment rate is now running at 4.6%, the highest of all the UK nations. The UK rate is 3.9%, with those of England, Wales and Northern Ireland running at 3.9%, 3% and 2.3% respectively.

As Government support schemes wind down from August to their final closure in October, those numbers are going to go up, the only question being by how much. As of May 31, there were 628,200 people on furlough in Scotland, about one-quarter of the country’s workforce. A further 146,000 people – about 70% of Scotland’s self-employed workers – have made a claim under the self-employment income support scheme (SEISS).

This has been accompanied by an unprecedented crash in business activity as Scotland’s economy has shrunk by 23% since the start of the coronavirus pandemic, with a near-total collapse in the tourism and hospitality sectors.

A Tweet this week from Finance Secretary Kate Forbes attempted to cast this news in the best light possible, noting that the 18.9% decline in Scottish GDP during April was not as steep as the 20.4% drop for the UK. But her effort was overshadowed by comments from Andrew Wilson, described as the First Minister’s “most trusted economist”, who warned that Scotland’s reliance on tourism and hospitality make it particularly vulnerable to the effects of lockdown and a loss of consumer confidence.

“What’s clear to me is the UK is set to be the worst performing economy in the developed world and Scotland’s probably going to be a bit worse because of the nature of our sectors and how the virus has behaved north and south of the Border,” Wilson told BBC Radio Scotland. He later added: “I think the prospects are that we need a monumental effort – politicians and governments working in collaboration – to get the measures we need in place to rescue businesses because the outlook for people, for families, is bleak.”

No-one wants to see a resurgence of the virus. But the fact remains that we are swapping a health emergency for an economic and social crisis of a magnitude that will irreparably damage lives on a similar or greater scale for years to come. Everyone understands the health risks of novel coronavirus, and what should be done to reduce those dangers. It is time to let the economy come out of hiding through the application of common sense, rather than blanket rules.