Government’s approach beyond coronavirus
The coronavirus pandemic has exposed and reinforced a problem that we have discussed with government before and it’s an issue they will have to deal with after the current crisis, rather than just trying to go back to the way things were. There are two main criticisms of the existing approach, one is they start with big business first before moving on to small business issues, small and micro businesses account for over 99% of the UK economy and any decisions on the economy and business should start with them.
The second issue is that they treat small and micro businesses like big business only smaller, this isn’t the case, they aren’t, they are completely different from their ownership, individual rather than shareholder, their management, size, resources, approach and within that small and micro business sector the range of business types is huge.
A failure to recognise this and work with it leads to one size fits all solutions which prove to be unworkable or not fit for purpose withing a short time of being put into practice. These two issues impact on our ability to respond effectively to the impact of the coronavirus lockdown on the economy, they will handicap our ability to come out of the lockdown and they will impact on us for years to come in terms of policy and regulation.
In terms of the actions the government needed to take to protect the UK’s small and micro businesses I would suggest the following would have been more appropriate and could still be an effective approach when looking at the removal of the lockdown.
First of all what is the objective or objectives, what is it that we are trying to achieve, in this case one of the objectives should have been to make sure that as many of the UK’s businesses through the coronavirus lockdown as possible.
Then they needed to break the economy down, first of all by business size, so sole traders, micro businesses, small business and I would break those down into two groups the smaller ones employing 5-19 employees and larger ones employing 20-49 employees. Then medium businesses and finally the big businesses.
Then look at each sector, what do they need to be able to continue trading, sole traders generally work from home, remotely or out of a vehicle. They can close down but they need to have a guaranteed income, so something like furloughing based on the monthly income they make works and hopefully they can shut down if required, (many can continue working from home or are in jobs where social distancing is possible) and be in a position to reopen when the lock down is listed.
Then look at micro businesses, many are small independent shops or smaller business units, so they have premises, they may have a couple of staff, but they are different, so a grant based on business rates relief helps, so does the ability to furlough staff and a vat holiday would help. Also working with landlords to reduce or waive rents during the lockdown would be a benefit.
Next look at small business and each of the other categories to ensure help is available for all sectors, finishing with the biggest businesses.
The think about business sectors that may need additional help, so in this instance the hospitality industry which was quite literally closed overnight because of the need for social distancing what additional support can be given to them. In a similar vein the arts, theatres, concert venues, cinemas their employees and suppliers will need additional support as the lockdown has potentially longer-term impacts for them, as well as sports clubs and their employees and suppliers. So, we have three sectors there who may need additional help and support and there may be more.
You could also look at businesses which may deserve a bit more priority in terms of ensuring their survival, so those that employ more people, food producers and distributors, suppliers to the health care system and care homes who look after the elderly and most vulnerable. By taking this phased and planned approach you make sure you cover all the sectors and do not come up with generic one size fits all solutions. You also have the ability to talk to businesspeople from each of these sectors and business types as you go along to get their input as well as double checking your thoughts and ideas as you move through the process. This does not take a lot of time, can be done on the phone, or online conference and stops the current trend of speaking to the same person from the same lobbying group all the time and receiving generic soundbites very often based on their own self-interest.
In the future Government could apply this approach to removing lockdown. It can also serve government at local and national level and be used by all the government departments when looking at policy and regulation. It may not be perfect, but it is streets ahead of the current way of working.
A definition of insanity is doing the same thing again and again and expecting a different result, the current thinking looking at big business first and then expecting the solution for them to work for small business either in the same form or in a stripped down version is madness. It leads to more problems than it solves, and it ignores the needs of a huge section of the economy, over 99% of the UK business population. So change the direction, look at the smallest first and work up to the biggest, looking for solutions at each level so you build a more balanced range of solutions rather than the current one size fits all approach, which will be far more efficient. It is a change in thinking and approach but its time to implement it!