The Effect on Business

[PuzzledObserver]

From the BBC's live reporting stream this morning:

"Businesses need clarity on the path out of lockdown to plan for the future, the head of the organisation which represents British businesses has said.

Dame Carolyn Fairbairn, the outgoing boss of the Confederation of British Industry, told the BBC the four-week lockdown in England from Thursday was "incredibly tough news" for businesses, particularly those who rely on the Christmas season.

While the extension of the furlough scheme was "welcome", she said they also needed to know whether the lockdown would end as planned on 2 December and what support would be in place after that date.

“They can plan if they know what’s happening but that pathway out is as yet unclear," she said."

Here's my comment: I fully understand that clarity helps with planning, and businesses would like it. The problem is that clarity is simply not possible, because it depends on the bloody virus.

We've all had to change our plans. All of us. And will probably have to do so again.

There are two ways in which the Government could provide the clarity the CBI is asking for:

1. They could say lockdown will end on 2nd December and never be imposed again. That runs the risk of the virus running rampant, massive numbers of deaths, hospitals overrun etc - and the economy still stuffed because many will stay home because of fear. Or that might not happen - we just don't know

2. They could promise to extend the furlough scheme until such time as x% of the population have been vaccinated, up to a maximum of y months. The risk here is that the costs will be massive..... can a government actually go bankrupt?

This is an uncertain time. Certainty, while eminently desirable, is not possible.

It has been indicated for the time after this month's lockdown to go back to a tier system.

So low transmission areas can begin to open up, some revenue for government, fewer people overall on furlough.

I don't think the UK government will go bankrupt but there might be stringent conditions on future money they borrow bit like what happened to Greece. But again think that unlikely.

Pointless asking this Government for clarity on when the lockdown will end, as any answer they give will be worthless.

I think it is a complete nightmare for businesses. It is not only the salary costs which they need to meet, which obviously furlough helps with, but many other costs too. Think about pubs, and all of the wasted stock. I would imagine a small business can only cope with that once or maybe twice if they're lucky, and then the money to continue stops (along with the jobs).
I hope that this lockdown does end on 2nd December, and I also hope that there is a strategy in place, which is communicated clearly, for what happens next.
I think we will have to learn to live with the virus, and if we have stop start restrictions, many businesses will not be able to survive.
I mean, would you put your money into a load of food and drink to stock your pub if you thought you might be binning it shortly? Or keep paying rent on a gym with no income?