In a survey conducted by the British Chambers of Commerce it has been found that majority of the business owners will be able to resume their operations within a week from the day the lockdown gets lifted. The media reports have also talked about the BBC tracker poll which has reported that nearly two third of its respondents (business owners) having fewer than ten employees would be able to commence operations in less than seven days while fifty per cent of businesses employing more than fifty employees responded that they will be able to commence operations within a week. These surveys, though sound optimistic, seem to have been conducted without taking into account the government’s recently released social distancing draft protocols which could substantially upset the estimates given by these businesses.
The lockdown which is set to open in the first week of June is being reviewed closely by the government as it is under the extreme pressure on account of surmounting losses being suffered by the economy. The number of infections and the number of deaths due to the virus has made the United Kingdom become the second most affected European nation due to the pandemic after Spain.
Ever since the lockdown the small and the medium sized businesses in the county have been the hit worst. The sudden dearth of footfall in these establishments has meant that several of them are on the verge of going bankrupt. Unlike large companies and businesses these businesses are solely dependent on their cash registers; these businesses buy their provisions on a daily or a weekly basis and also have a daily or a weekly turnover. Large companies have relatively deep pockets and can afford to sustain for a longer period as compared to these small businesses. The reopening of these small business is thus of paramount importance to the British economy as they hold the key to the livelihoods to the largest number of British citizens.
The optimism building around also has to do a lot with the recent government’s stimulus measures that it had announced in the past two months. The most critical of these stimulus packages was the furloughing scheme that the government had announced whereby businesses would be able to put upto 80 per cent of their employees under the benefit of this scheme who are suffering business losses due to the coronavirus pandemic. Under this scheme, the government has undertaken the forbearance to pay 80 per cent salaries of the furloughed employees upto a maximum of £2,500 per employee per month until the lockdown conditions in the country is in effect. This scheme helps the country to sail through the coronavirus crises as it first ensures that employees continue to receive regular income and secondly it makes sure that the financial burden of the businesses gets substantially mitigated so that whenever they have to reopen their business they have sufficient liquidity at hand. Further, the role of the “Bounce back loan scheme” announced by the government in this regard cannot be undermined. Under this loan scheme, small and medium scale businesses are eligible to avail of loans upto £50,000 directly by applying online and without stringent scrutiny that a usual loan disbursement process goes through. The scheme further entails that for the first year the business would not have to pay any interest or make repayments. Both of these schemes have in a way armed these businesses to effectively deal with the slowdown and they are raring to go once the lockdown is withdrawn.
One thing also needs to be mentioned here that though the businesses are prepared to resume operations at a short notice, massive logistical bottlenecks are expected to arise due to slow movement of goods on account of enhanced social distancing and other measures that will still be in place even when the lockdown is withdrawn. The number of people showing up in these establishments are expected to be less in numbers with consumer spending also remaining to lower levels. In this regard the government’s decision not to charge any interest on the loans granted to these businesses for a period one year seems to be provide financial backbone to the businesses. However, it is still likely that these measures would not be sufficient for the businesses to come back to pre-March 2020 levels any time soon, and more support would be required from the government for them to full recover from the caustic effects of the pandemic.
The number of infections in the United Kingdom due to the pandemic is not showing any signs of abatement despite stringent measures been taken by the government. While it is difficult to say how long these measures need to be in place, but the government fully has acknowledged that economy could not remain closed for long. The readiness showed by these businesses to resume operations at short notice is enthusiastic while the government is also putting in stringent public conduct protocols for the resumption of business activity in the country that these businesses as well as people coming into these businesses must adhere to. Social distancing measures like keeping distance of at two metres from each other, allowing only a few people at a time into an establishment and only operating with the most essential employees while allowing others to work from home where possible could end up making the life difficult for most of the businesses but seems to be the extremely important measures if the country wants to prevent a second wave of infections. In the event that the country is faced with a second wave of the pandemic, far a greater number of people would be infected leading to far a greater number of deaths and requiring a longer and harsher lockdown, which could be far more disastrous for the economy.
The government has already started to work with industry and labor groups to bring out workplace protocols and it has already published a draft proposal regarding the same. In the meantime the whole country is waiting holding its breath for the economy to open and restart their day to day activities.