Business cannot withstand two storms

We may be in the eye of the coronavirus storm, through the initial period of rough weather, but unclear about the turmoil that is yet to come.

Changes to the Coronavirus Job Retention Scheme, which has come to be known to us as the furlough scheme, means that employers will be asked to make a contribution to the wages of furloughed employees from August, with the amount gradually increasing each month until October when, as things stand, the scheme will draw to a close.

At this point, there is a fear that redundancies may follow, as businesses are unable to sustain employment because of trading conditions which are still not favourable. But only at that point will we be able to understand the damage that has been done. The coronavirus recovery plan was brought forward as the map that would lead us out of the storm, though without indicative dates, we don’t know when we will arrive at the final destination.

Given that the policy around business closures is set by the devolved government at Stormont, yet many of the support packages emanate from the UK Government at Westminster, there is a danger that this asymmetry could cause real difficulties.

For example, if bars and restaurants find themselves in a scenario where they are still forbidden from opening in August, but are expected to contribute to the incomes of furloughed staff, that may be the point at which the business may hit the rocks. After pressure from hoteliers, the Executive has revealed that hotels will be allowed to open on July 20. This gives the sector some light to look towards the shore, but it remains to be seen when they get there whether the hotel experience will resemble life before the storm, and whether bars, restaurants, saunas and the other activities which we associate with a hotel visit will be available. Hospitality businesses are expected to be the last sector permitted to re-open, included in Step 5 of the Executive’s recovery plan.

At FSB, we continue to hold the view that the re-opening of businesses should be based on the extent to which each individual business can protect customers, staff and the general public, rather than its size, sector, or what it sells. Businesses should be given the opportunity to innovate to respond to the new environment, as many have already done, with one-way systems, Perspex screens, take-away services and other adaptations. While this may be prove more challenging in a bar or restaurant setting, best practice around the world has proved it is possible maintain social distancing in many cases. Businesses in Northern Ireland are now seeing the Republic of Ireland easing their lockdown at a greater pace than here, which could leave them at a competitive disadvantage in the future as tourists seek to visit both parts of the island. Allowing businesses to re-open, providing safety is maintained, can lead to a move away from government support, and let the Job Retention Scheme serve its initial purpose - to retain jobs rather simply delaying inevitable redundancies.

But before we have even got through the coronavirus storm, another one is on the horizon. The Ireland/Northern Ireland Protocol, which was included in the Withdrawal Agreement between the UK and the EU to ensure a frictionless border on the island of Ireland, is due to come into effect at the beginning of 2021; just over six months from now. The UK has unilaterally set out its view of how it intends to implement the Protocol, though this is not necessarily shared by the EU. While the UK document promises unfettered access for Northern Ireland businesses to Great Britain, it notes the need for new declarations, as well as checks on agri-food and goods travelling to Northern Ireland which might be deemed to be at risk of entering the EU market. Even at this eleventh hour, as businesses are being battered by the coronavirus storm, they still await practical details of what the changes will mean to them, with much of the implementation is yet to be decided. While coronavirus is something which has impacted the global economy and is beyond our control, the implementation of the NI Protocol is quite the opposite; it is a challenge entirely of human construction. As such, its resolution and the damage it could cause is entirely in the hands of political decision-makers. Put simply, the new burdens that might be placed on business are not fire, flood, nor virus, and therefore can be overcome with pragmatism and goodwill. For those businesses that make it through the coronavirus storm, they will simply not have had an opportunity to mend their rooves by the time the next one hits. A sensible implementation of the new trading arrangements must be adopted to enable them to have fairer weather and better days ahead.

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

In order for us to continue to provide high quality and trusted local news on this free-to-read site, I am asking you to also please purchase a copy of our newspaper whenever you are able to do so.

Our journalists are highly trained and our content is independently regulated by IPSO to some of the most rigorous standards in the world. But being your eyes and ears comes at a price. So we need your support more than ever to buy our newspapers during this crisis.

With the coronavirus lockdown having a major impact on many of our local valued advertisers - and consequently the advertising that we receive - we are more reliant than ever on you helping us to provide you with news and information by buying a copy of our newspaper when you can safely.

You can also enjoy unlimited access to the best news from across Northern Ireland and the UK by subscribing to newsletter.co.uk

With a digital subscription, you can read more than five articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.newsletter.co.uk/subscriptions now to sign up.

Thank you