YESTERDAY’S announcement by the Office for National Statistics that the UK economy fell by more than 20 per cent from March to April – the largest fall on record, and three times as much as the contraction during the financial crisis of 2008 – shows the shattering impact of the coronavirus lockdown.
Though the dreadful human cost in lives, health and well-being has naturally been the priority thus far, these figures are the starkest demonstration of the financial devastation. There is a real danger that, if the process of reopening areas of the economy is botched, the long-term impact of the restrictions could prove as damaging as the disease itself.
It is welcome, then, that the Scottish Government should have announced its provisional intent to lift restrictions on aspects of the tourist industry from July 15, as long as progress has been made to phase three of the route map for exit. It is not only a crucial part of our economy, but tourism and other industries which augment or are a component of it, including the transport, hospitality, sport and cultural sectors, are those that have suffered the harshest effects during the period of containment.
It is cheering, too, that a move to phase two begins next week and, of course, that the death toll and rates of infection outside hospitals and care homes have fallen significantly.
There remain, however, major doubts about the handling and timetable of both the UK and Scottish Governments in moving towards lockdown in the pandemic’s early stages; the grim toll in Scottish care homes, which has been characterised as the greatest disaster of the devolution era, must be counted as an abject failure of government. The likelihood that the UK may be already one of the worst, if not the worst, affected countries in both fatalities and economic impact, ought to be a warning of the terrible dangers of mishandling the moves towards recovery.
The considerable problems not yet resolved in testing are further grounds for caution. Yet an overzealous interpretation of the precautionary principle, or delay for the sake of token difference, may end up causing irreparable damage to people’s jobs, livelihoods and personal lives.
At this critical juncture, it is imperative that the Scottish Government listens to business. If we are to find a way to begin the process of financial recovery, while at the same time minimising health risks – remembering that the disease has merely been contained to a level with which the health service can cope, not eradicated – it will be essential to assess what firms need, not merely in terms of financial support such as rates relief and grants, but in judging the relaxation of regulations that will allow them to function at all.
No one expects that things will return to anything like normality soon. Firms and employers have already made huge changes to the way they expect to work, but there are numerous areas where government needs to balance risk and pragmatic action. Many employees will find it difficult to return to work until schooling resumes. Social distancing requirements for workplaces will have a major impact on manufacturing productivity. The proposed UK quarantine rules obviously curtail foreign visitor numbers, and even if many Britons choose to holiday at home, there will be transport difficulties for coaches, trains and ferries.
Above all, without a serious examination of the guidance on the two-metre limit on public distancing, it’s difficult to see how many pubs, restaurants and small retail outlets can be commercially viable. Of course, it should be maintained if the scientific evidence is clear; but other countries have given more relaxed guidance without it leading to renewed outbreaks. It requires careful consideration, but being too timid in emerging from lockdown may be as damaging as the delay in entering it.
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