OVER the last few weeks it has been reassuring to see slowly, but surely, the re-opening of many parts of the economy. The unlocking of restrictions has seen May fiscal forecasts exceeded but is this simply down to an initial release of pent-up demand or the sign of a genuine and sustainable recovery?

We really are at the most significant crossroads of our lifetime.

Decisions taken now by policy makers, companies and our people will determine whether or not we recover quickly from the short sharp shock of Covid-19 or whether we end up swapping this for years of different physical and mental health, social and economic challenges that could dwarf those seen over the last few months.

As government support winds down the willingness of companies to take back the nine million furloughed workers will depend on their expectations about future demand for their goods and services.

Chief economist of the Bank of England Andy Haldane observed that the stronger those expectations, the lower the likelihood of job losses, creating a virtuous cycle. Firms will not make workers redundant if they need to re-hire them, at a cost, soon afterwards. This lowers unemployment risk, raises household incomes, confidence and spending thereby boosting the economy and protecting jobs.

A collective willingness to return to previous patterns of behaviour and spending is necessary to back this up. There is lots of talk of a ‘new normal’ but let’s not throw the baby out with the bathwater. There were very many good things about how things worked before all this. Yes, learn from what we have been through, but don’t force change just for the sake of it.

We all have a role to play in avoiding the creation of self-fulfilling prophecies. If we say things like, “I’m not going to the shops” or “we can’t return to the office” or “there will be no live events this year”, then the only certainty is those things will come to pass.

The Chamber has been working tirelessly over the last few months to support its business communities and many of the welcome policies we have seen have been down to our lobbying and influence. These life support schemes have been vital in enabling businesses to hold their nerve but now is the time to move the patient into rehabilitation.

We need our governments to provide both the stimulus to kick-start the economy and the messaging to rebuild consumer confidence. Our population needs to hear loud and clear that it’s now okay to get back out there, albeit with the necessary safely precautions in place and adhered to.

Some of the individual measures announced in the Chancellor’s recent Summer Statement were welcome, none more so than the cut in VAT rate to five per cent for the wider hospitality sector, something this Chamber vociferously campaigned for. Scotland’s hospitality sector has been hit hard and many businesses operating in it are teetering on the brink.

More is still needed however, including new incentives for business investment and reducing the overall cost of employment through a cut in employer national insurance contributions.

Ultimately though, the strength and pace of our recovery will very much be determined by the private sector – our business communities, companies large and small, our nation’s jobs and wealth creators. History tells us the companies that are brave, innovative and embrace the challenges and plentiful opportunities thrown up in times of economic turmoil are the ones at the vanguard of the recovery.

Russell Borthwick is chief executive of Aberdeen & Grampian Chamber of Commerce