Lockdown: The final countdown
The UK government's plan to end lockdown offers hope to accountants but may be overly optimistic.
The Prime Minister’s long-awaited announcement promises hope for a return to normality for both our businesses and our social lives. The hyperbole goes boasted about “a one-way road to freedom”.
By way of contrast, his counterparts in Scotland, Wales and Northern Ireland all appear more cautious.
The good news is that virus levels are diminishing and the vaccination project is going great; we can now see the tunnel and, if the PM is right, the light at the end of it.
The first big question is whether, despite warnings about caution, Mr Johnson might be over-promising again.
The second is how his four-step proposal is likely to impact on those in the accountancy profession.
In principle, our lives will get considerably easier and practices run more smoothly within weeks. If all goes to plan, every school child in England (but not the other countries of the United Kingdom) will be back in their classrooms on 8 March.
Not only is that great news for the kids, who will be able to enjoy social interaction with classmates and relish teaching from a live human being again, but it will also help their parents.
If you are trying to run an accountancy practice or any other business, it is unhelpful to discover that many of your employees are working as part-time teachers/carers at the same time as attempting to do their jobs. That should all change in a couple of weeks’ time.
However, without wishing to appear too pessimistic, given that the pandemic is still running at a dangerously high level, there has to be every chance that the legendary bubble system will regularly force classes and year groups to stay at home for 10-day periods following positive Covid tests.
That is all the more likely, when you realise that children and teachers are to be tested several times a week. Even so, this change should be a big fillip for us all.
The various intermediate steps are likely to be of greater benefit to some of our clients than to those in the profession, although the prospect of enjoying some of the finer things in life should lift our spirits.
In addition, if clients are able to normalise, that should ensure that more survive and, by extension, will protect our own operations.
At the moment, there has been a radio silence regarding the various government support schemes. Unless Rishi Sunak takes action at the Budget, a fatal cliff edge is approaching fast.
In the next couple of months, not only is the Job Retention (Furlough) Scheme slated to end but the business rates holiday and reduced VAT rate for the leisure and hospitality sectors will also disappear.
This will have a devastating impact on many struggling businesses. Therefore, one must imagine that each of these schemes will be extended, although possibly on better considered terms that direct relief more specifically to those genuinely in need – which may cut out accountants.
For this writer, the date that seems least likely to prove realistic is the last one – 21 June.
If the announcements on Monday are accurate, all pandemic protection measures will be withdrawn three weeks into June. Prima facie, this sounds reckless.
Even using the most optimistic predictions, at that point something like half the population will not have received a coronavirus vaccination. Because these are typically going to be those under the age of 50, the unprotected category will include the majority of employees at pretty much every accountancy practice in the country.
Going a stage further, using a rough rule of thumb, we must assume that anybody who has not had their first vaccination by the end of March will still be waiting for the second by 21 June. If that is the case, then this cohort will only be partially protected and compounds the problem.
This data, and the Prime Minister’s idea to open every aspect of society including our offices with no limitations or protections against this pernicious virus, seems worrying, if not alarming.
Yet again, we live in interesting times, which could easily morph into terrifying times unless the greatest care is taken.
On the basis of the information available at the moment, it will probably not be a good time to invest big money on a bet that the irreversible roadmap does not turn into yet another characteristic U-turn.