Omicron has businesses on their knees, the government must help
- Credit: PA
If you ask any business leader what the most difficult thing for them to cope with is, they will likely say “uncertainty”.
If bosses can see a bad patch coming, they can plan for it. They can cut overheads, change prices and try to borrow more cash.
But when that bad patch comes with no warning — or very little — they can become unstuck.
And now, after five years of uncertainty between Brexit and Covid, East Anglia is having the rug pulled from under it once again.
Hospitality businesses have borne the brunt of the pandemic. The on-again, off-again nature of lockdowns means pubs and restaurants have not only dealt with shuttering their doors for months on end, but have also footed the bill for re-opening. At least a couple of times.
Earlier in the pandemic, bosses were able to get loans from the government to cover their expenses. These loans were provided on a cheap, but not free, basis — adding to bosses’ outgoings.
But now, these payments are coming due on top of everything else.
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This year has seen everything from fuel to building materials rise rapidly in price.
These costs, coupled with those caused by ongoing supply chain disruption, have knocked on to everyone else in the economy, causing inflation to rise above expectations to its highest level for 10 years.
On Wednesday, the Office for National Statistics said the Consumer Prices Index (CPI) inflation rose from 4.2% in October to 5.1% in November.
Taken together, these changes mean that two-fifth of families feel poorer than they did at the pre-pandemic Christmas of 2019.
Partly in response to this, the Bank of England raised the interest base rate from 0.1% to 0.25%.
This move, taken to try and stop costs from spiralling up, will affect people with a mortgage — but probably not for a while yet — and will make it more expensive to borrow money from traditional sources.
Where, you might ask, is the government among all of this?
Several business leaders, as well as the shadow chancellor of the exchequer, have asked this.
And the answer, it turned out, was: California.
While bosses prepare to spend Christmas in quasi-lockdown, worrying about the fate of their businesses in the new year, chancellor Rishi Sunak is in California on a “long-planned trip conducting government business”.
At a time when the government is doing everything but tell people to stay away from each other, you might expect the chancellor to be front and centre explaining exactly what the government is going to do for businesses this winter.
Government officials did say Mr Sunak was holding one-on-one meetings with businesses including Greene King and Nando’s to discuss the impact of the government’s coronavirus messaging.
According to Andy Wood, the boss of Southwold-based brewery Adnams, who was also part of meetings with the Treasury, this mixed messaging has caused more uncertainty for businesses — this time about how much support the government will give firms.
His pubs have lost tens of thousands of pounds worth of bookings in the past few days.
“They need to restore confidence that businesses aren't going to be left high and dry,” Mr Wood said.
“The way you start to restore confidence is by giving some strong messaging that government is there to support business.”
On Thursday evening, it was announced that Mr Sunak would be returning home from California earlier than originally planned in a bid to ease worried minds in the business community and hold fresh talks about the Omicron crisis.
Mr Sunak pledged the government would continue to do “whatever it takes at every stage to support lives and livelihoods”.
But instead of promising the economic help bosses crave, Mr Sunak said: “To keep safeguarding our economic recovery and the lives and livelihoods of the British people our priority is now to make sure everyone has the opportunity to get boosted now.”
Yes, the boosters will help protect the economy. But in the lull before the rollout takes affect the government needs to put its money where its mouth is and stump up the cash to help businesses — before it’s too late.