Springwood Tree Services, based on the Nottinghamshire-Lincolnshire border, have stopped trading for the safety of their workers, their clients and their family. There is not a blanket restriction on this activity although the husband and wife team that run the business explained that it would be virtually impossible to observe social distancing rules and to avoid sharing of tools and machinery. They wanted to do what they feel is the right thing.
As a small limited company with no full-time staff, just subcontractor arrangements, they do not qualify for self-employment income support scheme (although thankful the self-employed contractors are covered). As will so many rural businesses, they are not VAT registered and they recently discovered that their landlord has not registered their property for business rates so those relief schemes no not apply either. This leaves one partner able to claim 80% of his nominal salary in relief but no relief for the lost profits. Unlike self-employed people, he is not allowed to continue working for the company in this situation either. They are praying that the bank will process their Business Interruption Loan application before too many more bills arrive and they hope that the rental protection scheme for commercial leases will offer an additional safety net. This highlights the vulnerability of limited companies with few capital reserves for whom any delays in administering the loan could be terminal.
All small businesses are facing uncertain economic conditions, but they are used to dealing with some uncertainty. What is most important is that they have an exit strategy, but they can’t do this without clarity from government. So what are they able to do?
- They have agreed with clients to delay work that is already in the books so that they have an income when things start again and they are relying on trust that this work isn’t given to competitors.
- They are looking at their client groups to identify which will be in a position to spend money on their services once lockdown ends. As individuals, we might all rush to the pub, the beach or the shops but tree surgery will probably not be high on the list. For commercial clients too, they will take time to get their own businesses back in order so again, tree surgery is unlikely to be a priority.
- If lockdown is extended, the salaried partner will probably have to work in another business to maintain their family income, exposing his family to the risks they are trying to avoid.
Alongside a clear plan for ending the lockdown, rural businesses like these need a head start to enable them to get up and running within a local area, adopting safe working practices. The intensity of the health risk is lower in rural areas and a phased end to the lockdown that allows rural businesses to get up and running again is essential. An end to lockdown that occurs everywhere at the same time would give a huge commercial advantage to businesses that have been able to stay open, that have potentially gained market share and that have the cashflow in place in capitalise on the spending boost that would ensue. A regional approach should be combined with strong messages to support local businesses and thus reduce travel and widespread social mixing.
Tourism and recreation may have to wait a bit longer as these will see much more social mixing that other manufacturing, business services and land-based work. Getting village schools and parks open again to allow families to work within their local communities should be a priority for overall health and wellbeing effects too. These are not “luxuries”, these are fundamental necessities for preserving society as we know it. As I have said before, in times of war nations sacrifice lives to protect the society they believe in. Today, we ungently need to put society and communities first and not allow countless lives to be lost or damaged in coming months and years due to prolonged lockdown in areas where the risks of Covid-19 are much lower.