By Laura Savage
Best for Britain's Campaigns Officer
As expletives go, it’s one of our more versatile. An expression of anger, disappointment, fear or even joy, it can sum up situations in a way no other word really can.
Best for Britain polled more than a thousand SME (small/medium enterprise) owners and asked them to express, in just five words, their feelings on Brexit, the coronavirus recession, and the future in general.
Which word appeared boldest and brightest? I’ll give you a clue – it wasn’t ‘fudge’. In these uncertain times, our most multi-talented swear-word seems to be a familiar fall-back.
Tell us how you really feel.
But ambiguity is versatility’s unobliging friend. Those F-words hold a multitude of meanings at which we can only guess. There are experiences and struggles that lie behind every appearance of that little word: businesses are failing, or closing, people are losing their jobs and their livelihoods.
While countries begin to ease lockdown measures, there is a sense we have only just begun to feel the devastating economic ramifications of the pandemic. Even if some semblance of normal life now seems tangible, these worries undercut our feelings of hope, especially amongst those who rely on small businesses. Other words emerged from our survey – ‘anxious’, ‘pessimistic’, ‘fearful’, ‘uneasy’. Although, of course, our respondents have been self-selecting, in broad strokes these words paint a general picture of despondency in the UK.
Looming in the shadow of this global pandemic is a massive mental health crisis. The lockdown has deepened unjust divisions that existed beforehand, sometimes trapping people in toxic or dangerous environments. Anxiety and depression are on the rise, and mental health services, stretched paper thin even before the pandemic, are struggling to cope.
Data, Data, Data
These insights give only a pointillistic impression of Covid-19’s human toll. That’s why, at Best for Britain, we value data. Cold and impersonal as it may be, quantitative analysis allows us to see the bigger picture more clearly.
Best for Britain commissioned a report from the Social Market Foundation, an independent, cross-party think tank, on the economic implications of Covid and Brexit. Whether the UK leaves the transition period in the midst of the Covid-19 recovery with a Free Trade Agreement or no deal at all, there will be a significant, negative economic impact.
Breaking the impact down into regional and industry sectors shows us we’re right to be worried. The picture painted is full of contrast, shadows falling across some regions and sectors much more dramatically than others.
Manufacturing, finance, banking and insurance industries will be the most severely impacted, with a ripple-effect for regions which rely most heavily on these sectors for employment.
Two regions which have the most to worry about if we exit the transition period without a deal in place are the North-West of England and the West Midlands. Half the local areas in the North-West are placed in the highest risk category for exposure to this double economic hit, while a further 40 per cent are in the second highest category.
In contrast, London and the South-East will suffer most from this double economic hit under an FTA agreement.
Whichever way you turn the picture, it doesn’t look good. The report shows that any change in the UK’s trading relationship during the Covid recession will inevitably slow recovery. Just as the pandemic has placed a heavier burden on some more than others, the double whammy of the coronavirus recession and Brexit will hit some places and some people much harder – often communities least equipped to deal with the fallout.
The view from the ground
The lockdown has caused a shockwave to pass through UK businesses. While the Government’s emergency fiscal policies – particularly statutory sick pay, the Coronavirus Job Retention Scheme and self-employment support – will have probably offset some of the immediate impact, the speed and pattern of recovery for businesses still remains uncertain.
For SMEs, the transition period was supposed to be used to prepare for the UK’s departure, and to work through what new Customs procedures and product standards would mean for their specific circumstances. But, in the wake of the Covid shockwave, many must use this time simply to stay afloat.
Our business-owner survey mirrors the regional disparity we found in our impact assessment. In the North-West, 63 per cent say their business is at risk because of coronavirus and adding No Deal will make things worse, whereas nationally the figure stands at 57 per cent. In the West Midlands, only 10 per cent of SME owners say they were prepared for a No-Deal Brexit before the coronavirus hit, and a worrying 85 per cent say No Deal plus Covid-19 would spell disaster for their business.
Many SME owners say they have received no or inadequate advice pertinent to their business from the current Government guidance on changes to rules and regulations from January 2021.
One business owner remarked that Brexit and the coronavirus had made the future so uncertain as to render any advice or guidance impossible. Another respondent, who owns a consultancy business employing more than two dozen staff, said: ‘It's hard to prepare for something that's as big and unknown as what the Brexit deal might look like.’
If the Government doesn’t know what a deal will look like, how are businesses meant to guess, let alone prepare?
Inevitably, it is the element of unknown, the uncertainty about the future, which is so troubling for independent business owners – it stagnates investment, precludes proper business strategy and causes untold personal stress and anxiety.
Of the SME owners we surveyed, more than half have up to 50 employees. Each business represents the livelihoods of multiple families – the inability to guarantee your staff stable employment must weigh heavily on the mind of each independent business owner.
What’s to be done?
The UK has lit a fuse on a deadline that is very difficult to meet, consigning us and our trading partners to a rushed deal or, increasingly likely, No Deal. Only 4 per cent of SME owners nationally think the Government will manage to agree a deal that is good for business, and 72 per cent think the Government will simply fail to get any kind of deal at all with the EU.
The press coverage of our impact assessment report has been encouraging. While coronavirus has understandably dominated minds and headlines, many are now waking up to the reality of a No-Deal Christmas.
The small business owners we surveyed are ahead of the curve. They’ve had a taste of the challenges to come: battling with changes to Customs and tariffs, uncertain product standards, decreased investment prospects. These entrepreneurs understand what’s at stake – that’s why 77 per cent of business owners support an indefinite extension to the transition period, compared with just over half of the general public.
We often talk about extending the transition period in terms of giving the UK, and the EU, time to negotiate the best deal for the UK. But we mustn't forget the farmers, builders, dentists and truck-drivers.
All those F-words are alarm calls, ringing out from small businesses across the UK, asking for a bit more time. They’re seeking another F-word, fairness: a fair and realistic amount of time in which to cope with the two huge upheavals of Covid-19 and Brexit.