Lockdown – reflections at the end of week 5
In my earlier notes in this series, a number of themes have continued to come up, the furlough scheme, rent and commercial landlords and the extent to which direct support from government will be made available to businesses being amongst them.
There have been developments since I wrote last Friday, with
1. The furlough scheme being extended until the end of June, which will provide valuable support to large numbers of businesses 2. The furlough scheme’s portal being opened to applications 3. The government responding to concerns that landlords were using or thereatnening the use of statutory demands and winding up to collect rent as a counter to the suspension of their right to repossess for non-payment of rent. This suspension, and a delay to the right of landlords of commercial properties to use Commercial Rent Arrears Recovery unless rent is in arrears for at least 90 days will provide relief and support for tenants but will do little to help landlords to meet their own financial obligations which is a matter which government must look to address; and 4. The announcement of a grant pool of up to £1.25 bn to support innovative firms
Nevertheless, pressure on government is increasing to set out a plan as to how we will move away from the current form of lockdown. It is plain that decisions as to the nature and timing of any move away from the lockdown will not be easy. There is a clear need for public health to be protected, with a key element in doing so being to ensure that the incidence of Covid-19 in the general population is managed in such a way as to enable the NHS to maintain the levels of care and service that it and its courageous and generous staff have provided thus far. Coming in the other direction are a number of conflicting interests, not least that the economy needs to function in such a way as will allow the current measures to be paid for both now and in the future.
We are in regular contact with businesses whose owners and directors have been able to postpone decisions due to the support measures offered by government since the lockdown began or because the need to make them, whilst of strategic importance to the business, was not time critical. Those decisions range from, at one end of the scale, whether and where to cut back or what to do about a lease renewal, to, at the other end, whether to continue trading at all. There are some instances where informed decision making is impossible or near impossible because of the absence of any indication as to how to plan for the movement out of lockdown or, indeed, when it is likely to be.
In the absence of a vaccine against Covid-19, there are no safe options for government, and any relaxation of the lockdown will have some unwelcome consequences. It will interesting to see how the government approaches this difficult task in the days to come.