If Covid lockdown ends too soon, Scotland's economy will suffer – CBI Scotland

We cannot be reckless about ending the coronavirus lockdown, while Scotland and the rest of the UK must avoid too great a difference in their exit strategies, writes Tracy Black, director of CBI Scotland

Nicola Sturgeon and Boris Johnson have warned the lockdown is set to continue for some time to come
Nicola Sturgeon and Boris Johnson have warned the lockdown is set to continue for some time to come

If there’s an emerging sense of restlessness among Scottish businesses to get back to work, it can hardly come as a surprise. Facing such an unprecedented crisis and weeks of lockdown, firms are desperate to return to work to protect jobs, their businesses and the wider economy. Others, those not facing an immediate existential threat, are similarly restless because of a compelling need to innovate and compete – the defining characteristics of British industry.

But restlessness cannot be allowed to become recklessness. Businesses are clear that economic restart will not come at the expense of the health and wellbeing of families, colleagues and communities. Aside from the moral dynamic, there’s also a very practical rationale for not rushing the process: we could end up back at square one.

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While both the Prime Minister and First Minister have signalled that restrictions won’t be lifted anytime soon, that doesn’t mean we should postpone important discussions about how to restart the economy when it’s safe to do so. Businesses can’t be left in the dark and forced to speculate about what happens next, they have to be actively involved in shaping the process. With that in mind, I’ve outlined some principles that should guide any safe, effective and confident resumption of economic life in Scotland.

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From the outset, we’ve been crystal clear that this is a public health crisis first, but one that requires a ‘lives and livelihoods’ response. With daily reminders of the physical and mental toll the virus has taken on the country, we know only too well that prolonged economic stagnation would only exacerbate these problems as mounting business closures, unemployment and debt begin to bite. Confidence is key. Workers everywhere must trust that any decision to return to work is informed by scientific and medical expertise, with a health-first approach that stresses safety and transparency.

Dangers of false starts

What breaks confidence is fragmentation. Government, health experts, businesses, unions and civic society must work together to develop and implement the plan. With unity comes clarity, transparency and resilience. We simply cannot afford for significant divergence between Scotland and the rest of the UK if we’re to successfully support firms as they protect employees and the economy.

We also need to be clear about the dangers of false starts. As one company told me recently, “knock me down once and I’ll get up; knock me down twice and I might not”. There’s no need to replicate the brutal immediacy of lockdown, in fact a slow restart is far preferable to having to shut down the economy twice and lose out on a faster, more sustainable recovery. While resilience has been impressive to date, bolstered by much-needed government support, two shocks in quick succession would have deep and long-lasting implications for Scotland’s already fragile economy.

Loosening restrictions on those companies and public bodies that enable economic activity, like schools, nurseries and transport operators, needs to happen before others can return to work. For businesses, sector-by-sector or workplace-by-workplace matters much less than providing clear sequencing and timetables to inform decision-making. Capacity to cope should be the key driver of implementation – with targeted support measures remaining in place throughout, flexing as firms move at different speeds. Getting valued sectors like construction back to work can only speed up recovery.

Renewed optimism

Let’s also be clear that a ‘one-size fits all’ approach won’t work. Government simply can’t control everything. Businesses come in all shapes and sizes, outdoor/indoor, factory-based and more besides, they’ll need flexibility to operate within any established framework. Clear guidance and proportionate enforcement would allow firms to press ahead where safe to do so, or slowdown if necessary. We should also do whatever we can to learn lessons from countries that are ahead of us in the restart process, while recognising the unique characteristics of our own economy.

The final piece of the jigsaw is ambition. We must build back better than before. However difficult this situation, it’s given us the opportunity to look at the economy through fresh eyes and decide what we want to build for Scotland’s future. From tackling inequality to investing in innovation, digitising the economy to recalibrating our education and skills system to meet future needs, progress has been far too slow. Revamping our tax and regulatory system to make it more competitive, setting clear goals to drive productivity gains – that is the economic legacy Scotland needs to leave from this crisis. In partnership with government and others, business has a duty to step up and show leadership both during the crisis and in rebuilding for what’s ahead.

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While this has undoubtedly been a difficult situation for everyone, with tough times still ahead, we can emerge from the crisis with renewed optimism. While economic activity may have been on ice for some time, I can assure you that the ambition of Scottish business is anything but diminished. Ensuring a safe and effective restart for the economy will be a difficult balance, but guided by the best medical, scientific and business advice around, I’m confident we can emerge successfully with a new economic architecture that points the way to the future.

Let’s also remember that companies that navigate this critical period by showing kindness, consideration and humility will be long remembered by the people they serve and have a much brighter future as a result. To do that we must leverage the restlessness of business to power our recovery, while putting recklessness to aside.

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