Spotlight Leader: A flexible response to the crisis

The government must be creative in its support for big and small businesses alike.

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On 4 July, while people across England were readying themselves to go out for “Super Saturday”, there was one part of the country that was staying decidedly more sober. At the end of June, Health Secretary Matt Hancock had urged residents of Leicester to “stay at home as much as you can”. The area had 135 cases of the coronavirus per 100,000 people, three times as many as the next highest city.

Not only were bars, restaurants and hairdressers to remain shut, non-essential shops that had been allowed to reopen in the Midlands city on 15 June were ordered to close again. On 2 July, local schools also closed to all but vulnerable children and key workers’ families. An announcement on whether the UK’s first full local lockdown will continue is expected on 18 July.

The UK is not alone in taking this approach. Localised lockdowns have been imposed as far afield as Australia, and as close to home as Germany, in a bid to contain Covid-19 and get struggling economies back on their feet. But for companies and their staff, this creates impossible uncertainty. The climate is tough as it is, but how can you build back at all, let alone better, if you don’t know for certain that you will be able to operate?

Following Rishi Sunak’s recent summer statement, shadow chancellor Anneliese Dodds suggested a potential solution: flexible furlough. The job retention scheme, which is due to be wound up in October, has spent £27.4bn supporting 9.4 million jobs to date in the UK. “We need a strategy for the scheme to become more flexible, so it can support those businesses forced to close again because of additional localised lockdowns,” Dodds said in parliament. “There is still time to avoid additional floods of redundancy notices.”

Such flexibility would ensure longer-term support for hard-hit sectors of the economy, as well as geographic areas seeing spikes of the disease. It would enable businesses to plan ahead. For those able to work from home, flexibility has been the byword of the coronavirus era. For many firms, whether shifting to online services or takeaway pints, the ability to be flexible has helped them weather the economic storm. The government should respond in kind.

This article is from our recent Spotlight report on business continuity. Click here to see the full supplement.

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