The View from the Chair, Tina McKenzie - May 2020

Press Releases 12 May 2020

Preparing for the 'new normal'

At the beginning of the coronavirus crisis, people often gave reassuring messages to the effect of ‘sit tight it will be all over soon’. While these were certainly well meaning encouragements, they are clearly no longer appropriate. There is now a growing realisation that while we have passed the first peak, the risks associated with Covid-19 will be with us for some time yet, and we must find a way to live and work in a new set of circumstances. The support that has been brought forward by government, both at Stormont and Westminster, has been welcome. In particular the Job Retention Scheme, which has enabled businesses to ‘furlough’ workers - a word and process with which we have all now become familiar - has helped avoid mass redundancies. However, continuing furlough and business closures for too long may simply delay the inevitable, and could result in the Job Retention Scheme costing a huge amount of public expenditure and building up debt, meaning we wouldn’t be able to invest properly in key public services.

Rather than a blunt choice between furlough, return to work, or redundancy, there is another way. The furlough scheme can be extended and made more flexible, so that businesses don’t face a cliff edge by the sudden ending of support, which would lead to many collapsing and huge increases in unemployment. Instead, an asymmetric evolution of the scheme offering flexibility to allow businesses to use workers part-time, or recognising that some types of business may be more in need of support for longer, could work in tandem with other sections of the economy operating more normally.

This should not be seen as business being reckless or gung-ho about restarting –quite the contrary. We should always take our lead from the public health guidance, and nothing should be done which would compromise safety; but our health response requires resources, and economic activity is essential to provide the tax revenues to sustain government and good public services. Many businesses which closed by their own volition have begun to re-open because they have implemented changes to protect their employees and customers. If it is safe to operate, businesses should be encouraged to do so, but they also need support, including clear guidance and advice to allow them to make necessary adaptations. We should ensure that the ‘barometer’ for a business reopening is not based on sector but, rather, on how well it can abide by social distancing or other protective measures. If we think of the economy as a three legged stool, comprising workers, customers, and the general public, all three must be safe and secure for it to work effectively.

The guidance on safe working practices published by the Department for the Economy, in which development FSB played a key role, is helpful to allow businesses to make their own decisions based on best practice. Following the Prime Minister’s announcement at the weekend, there is now a conversation about how we might re-open our economy in the near future. However, the measures and details of his plan largely apply only to England, and it is understood that the Northern Ireland Executive’s recovery plan is due to be made public today (Tuesday). Given the political geography of these islands, it is possible that there may be some degree of asymmetry in the approaches taken by the British, Irish and devolved governments. It is key that the relevant authorities continue to work in a joined-up manner, as much as is feasible, even if their approaches aren’t completely in lock step. Where there are differences, these should be because of scientific and medical evidence and advice.

Small businesses are highly adaptable and innovative, and have survived through crises before, and they must be allowed to find a way forward once again. Let me be clear, this is not about returning to old ways; this is about finding a way for our economy to recover quickly in the new circumstances in which we find ourselves, to avoid a deep, prolonged and harmful recession which would impact lives and livelihoods, and cause untold damage to wider society.