Leicester on lockdown - a blow to the local economy

On 29 June, Leicester became the first area of the UK to be placed into a local lockdown, setting it back several weeks while the rest of the country geared up for the reopening of pubs, restaurants and other venues. Chris Hobson (pictured), director of policy and external affairs at East Midlands Chamber, explains how this has impacted businesses.

Some christened it “Super Saturday”, while others labelled it as England’s “Independence Day” given its coincidental overlap with the American federal holiday. But while the UK celebrated the

reopening of pubs, restaurants, cinemas and hairdressers on 4 July after three-and-a-half months of Covid-enforced closures, there was no one marking the occasion in Leicester. That’s because just five days

earlier, the Government had imposed a local lockdown on the city, along with parts of neighbouring local authorities, due to a reported rise in local infections. It meant businesses in the hospitality industry that had forked out on perishable stock in anticipation of welcoming back customers were suddenly out of pocket. Being forced to waste this money

has created more significant and underappreciated financial problems – the last thing they needed after an extremely challenging period since nationwide lockdown begun on 23 March.

While the overarching reason for

the local lockdown was understood as necessary for wider public safety, the decision by the Government on 9 July not to provide any additional, tailored support to Leicester businesses was a massive mistake. Many businesses had taken

advantage of the relief packages offered at the start of lockdown, which have proven to be a lifeline for many. But without additional help, there will unfortunately be a greater number of business failures in organisations that, without the impact of the forced closures, would otherwise be fundamentally sound. We, along with many others,

have lobbied Government to provide additional support. We have argued this needs to be in the form of grants, as opposed to debt, to prevent storing up greater problems for 12 months’ time once interest rates pick up or deferred VAT needs to be paid. We have even made suggestions

of where this funding might be found, drawing on underspend in original grant money existing in local authorities across the country.

‘The decision by the Government on 9 July not to provide any additional, tailored support to Leicester businesses was a massive mistake’

Leicester and the surrounding authorities – along with any future local authorities affected – should be able to access some of this pot to deliver hyperlocal support to businesses impacted. Importantly, we have stressed

the importance of clarity over what an exit strategy may look like, so businesses can be supported in their planning and decision-making. At the time of writing, we are yet

to get any positive response from Government. Indeed, when the first review of the lockdown took place on 16 July – which took into account the more granular data available – the criteria for decision- making seemed even more unclear, with some parts on the outskirts of the city released from lockdown while others with comparable levels of infection remained in lockdown.

So where does this leave Leicester, along with any other part of the country that may suffer a similar fate in the future? Since the extension was

confirmed, Government has announced new local powers for authorities to enforce closures where they identify emerging problems. There will likely be future localised outbreaks but these new powers, combined with timely,

localised data – which, four months into the pandemic, must be within our capability as a country – may help avoid huge swathes of a local area being held back unnecessarily. This would enable local

government to effectively balance public safety with the needs of the whole economy. But these new powers come too

late for Leicester, which now risks finding itself at the wrong end of a two-tier economic recovery. Westminster has hopefully

learned that a city-wide lockdown is a blunt instrument. And that blunt instrument has hit both the cashflow and confidence of local businesses and communities in and around Leicester. These people have picked

themselves up time and again over recent months, and they will be the ones that drive the ultimate economic recovery from coronavirus. They are created by local

entrepreneurs, based in local communities and employ local people, and through no fault of their own they find themselves at a significant disadvantage to the rest of the country. They now need all of our support

– including that of Government – in order to get through this and hopefully emerge as a stronger, more resilient economy.

business network August/September 2020 29

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