Lockdown – reflections at the end of week 9
This has been a breathless news week where it has been difficult to draw out any strong themes because it has felt like every positive has had its accompanying negative and vice versa. To illustrate
1. The Bank of England has spoken of a steep but V shaped recession, which would mean a quick bounceback when more usual trading conditions return. The chancellor has agreed this week that the recession will be steep but has not supported the quick bounceback, instead predicting a much more drawn out recovery
2. The Covid loan scheme has been extended by the government to much larger companies than before, which feels like a good move in helping those companies to survive. On the other hand, we have seen another sizeable business failure in the Café Rouge/Bella Italia/Las Iguanas group as well as large job reduction announcements from Rolls Royce and British Airways amongst others which shows that the offer of loans may not be the right solution for many
3. The take up of the furlough scheme remains high, which feels to be generally a good thing, but this week has also seen the announcement of a significant increase in universal credit claims which is an indicator that a large number of jobs have been lost in spite of the furlough scheme. This increase is likely also to reflect a sizeable number of self- employed workers whose earnings have been hit by lockdown
4. Inflation has dropped which would seem to be a help to families whose income has dropped, but the principal contributors to the drop were lower petrol and diesel prices and domestic energy costs at a time where cars are being used a great deal less due to the lockdown and warm weather has diminished domestic energy demand. Some food items have increased in price which is not a help to those whose incomes have fallen
5. Government borrowing is steepling, but few would argue that the government should not be stepping in with financial support in a time of such crisis
6. Some encouraging figures emerged from London this week about Covid infection rates and Covid related deaths, but the chaos around testing and track and trace apps has led to apprehension about a second spike as lockdown is eased.
7. Schools are going back soon-or are they?
8. Universities are still not able to tell current and prospective students what will happen this year. Whilst Cambridge has been a notable exception to this, many are delaying because they fear the financial implications of new students looking to defer entry with its accompanying drawdown of several thousand pounds of student loan if they are offered a virtual and locked down first year. This puts universities and new students in an unenviable position, with the only mild positive being that IT can operate to allow effective virtual teaching to take place
9. Love it or loathe it, football is back, but some players in the Premiership are declining to go back into group training because of health concerns and those who have reported on Bundesliga games in empty stadia have spoken of a rather eerie experience
After all that, a number of key facts and decisions remain. The government still has the unenviable task of balancing control of the spread and effects of the Covid-19 virus against economic and other wellbeing considerations. Individuals remain locked down and businesses still have to tangle with the many challenges involved in securing their future against current adverse trading conditions and future uncertainty. This leads to this week’s plea. Government’s job is difficult, but the UK’s population is sympathetic to those difficulties. It is important that government leads and treats voters like adults, and a week which has seen inconsistencies in announcements, for example in relation to the track and test app , the throwing of blame backwards and forwards between ministers and scientific advisers, a significant government U-turn and an increasing tendency by government to politicise the whole Covid-19 issue has not been helpful to those undergoing lockdown and trying to plan for the future.