By Oliver Gibson – KLTV Contributor
Two national lockdowns and accompanying Covid-19 restrictions were bound to affect the economy in various ways, all of which being negative.
To keep people safe, as the Government would put it, social lives have been put on hold, businesses have had to close, some permanently, and jobs have been lost.
However, with the Christmas period usually entailing a hike in economic activity and in socialising, some of the ramifications of the pandemic could be muted, in a welcome send off to a year that fell short of many of our expectations.
Christmas spending in normal times
According to the Bank of England, a typical British household spends over £2,500 a month. That same typical household spends an extra £800 around Christmas.
Usually, a number of areas of spending see changes in the Christmas period:
- Food spending increases by 16%
- Spending on alcohol increases by 39%
- Spending on clothing sees an increase of 43%
- Spending on books increases by a considerable sum of 85%
- Spending on music and DVDs increases by a whopping 116%
Impact of the first lockdown
The first lockdown, which initially enjoyed a considerable level of support in Westminster and from the public, for a time, brought the Covid-19 pandemic under control.
While testing had been criticised as being sluggish from many in politics and in the media, the curve was decisively flattened, and August became a month for consumers to ‘eat out to help out’ – albeit in a sensible, Covid-safe way.
The lockdown’s impact on businesses was terrible. In one fell swoop, a recession of 20.4% wiped out the economic growth of the past eight years, a record figure but hardly one to celebrate.
The Office for National Statistics put the unemployment rate at 4.8% in September, meaning that 1.62 million people are currently out of work. That figure was an increase of 0.7% over the previous three months, which equates roughly to around 200,000 people.
Eventually, there was some good news. The ‘eat out to help out’ scheme was thought to have increased restaurant spending by a third, with four in ten people heeding Rishi Sunak’s call for Brits to boost the hospitality industry – which is thought to employ up to 3 million people.
In the quarter that followed the record Covid recession, Britain’s economy then grew by a record 15%. As restrictions were eased, consumers awoke from their long hibernation on Netflix and Amazon and visited their local shops and spent time with their friends and families after such a long time apart.
After the reopening of schools, colleges and universities the Covid tide began to creep up the shores of Britain once again before, by October, daily new cases reached a record high.
Second lockdown so far
The second, month-long lockdown is now nearing its final stage. On the 2nd of December, shops, restaurants and other businesses will once again open their doors to customers in a socially distanced way.
The BBC recently reported that, despite all the hardships of this year to families and individuals, the ‘cold reality’ of the coronavirus’ cost to the UK is yet to appear.
The Spending Review, an instrument by which the Government updates its spending priorities, will feature statistics from the Office for Budget Responsibility that will show just how damaging the pandemic has been and continues to be to this day.
It is estimated in the same report that the budget deficit for 2020 will be ‘more than ten times what it was’ in 2019. This figure, when finalised, will feature alongside the new unemployment figures and other consequential economic forecasts and predictions.
The Government’s ‘Covid winter plan.’
The Government recently unveiled their ‘Covid Winter Plan’, which they have billed as the ‘route out of the epidemic’ for the UK, ‘provided vaccines are approved and successfully deployed.’
The plan features a commitment to the UK’s return to the regional tier system that was in place before the imposition of the second lockdown.
Commentary on the regional tiers system has been mixed up to this point, with Boris Johnson hailing it as a policy that would save the UK from an ‘intolerable death toll,’ Keir Starmer labelling it as a ‘catch-up’ scheme, and some studies casting doubt on the effectiveness of local restrictions.
The Government also outlined its intention to increase testing capacity from 500,000 to 1,100,000 a day. As an area of Covid policy that the Government has been under close scrutiny for, this new increase in testing may put to rest some early doubts.
Needless to say, an increase of that magnitude should help those who would otherwise not know that they had the virus, such as in the case of asymptomatic sufferers, to stay at home as and when is required.
The Government also promised to publish ‘clear indicators’ that will explain why areas are placed in their respective tiers as well as information as to how areas can ‘move between tiers thereafter’.
Following Keir Starmer’s repeated calls in the House of Commons for clarity on this matter, such an explanation could very well increase public confidence in the policy.
Tier 3 areas are also to be prioritised for the rollout of mass testing, with ‘up to 13 million’ people being offered two tests before Christmas.
What could happen under the new tiers?
While West Yorkshire was set to enter tier 3 restrictions in October, this move was shelved following the decision to impose the second lockdown. This meant that, in the time leading up to the second lockdown, Kirklees remained under tier 2 restrictions.
It is not yet known which tier West Yorkshire would operate under after the end of the lockdown. This information is set to be made available on the 26thof this month.
New tier 2 restrictions would mean:
- The reopening of non-essential shops, hairdressers, gyms and other businesses
- Pubs and restaurants would close at 11 pm, with last orders taking place an hour earlier.
- Alcohol only being served with ‘substantial meals’ in pubs.
- Up to 2,000 spectators of sports outside, or 1,000 inside
- No mixing of households indoors
- Outdoor mixing permitted in groups of up to 6
Whereas Tier 3 restrictions would entail:
- Pubs and restaurants remaining shut unless for takeaway services
- Cinemas remaining closed
- Sporting venues remaining closed
- No mixing of households indoors
- Outdoor mixing of groups up to six permitted in selected public spaces such as parks
No matter which tier West Yorkshire wakes up to on December 2, there will be impacts upon the economy and on mental health.
Christmas is usually a period where economic and social activities increase, with people spending more money and meeting up for festive celebrations.
It is quite possible that most people will be keen to see the back of 2020, with the year having seen more than its fair share of misery and recession. However, if the Christmas period is executed safely, it could prove to be a welcome boost to the economy and, of course, to individuals as well.
Appeal to shoppers
With the Black Friday sales taking place exclusively online this year, and with many ‘non-essential’ shops remaining closed for most of November, online retailers such as Amazon have been presented with a unique advantage over the high street.
Alongside employing fewer staff, operating no premises on the high street (therefore serving little to no benefit to towns such as Huddersfield), and paying far less tax than it should, Amazon now could be in the position to deliver a brutal blow to businesses in Kirklees and in the rest of the United Kingdom.
If Kirklees found itself in tier 3 restrictions in December, this would no doubt serve to help Amazon and other impersonal/online service providers and to further hinder many of our shops, cafes, restaurants, gyms, hairdressers, and other local businesses.
When Christmas shopping begins, pay some thought, if not money, to the shops that provide not just a service to the economy but also one to the people of Kirklees.
Boosting the profits of Amazon, a company that paid a pitiful £6.3 million in corporation tax last year (compared to sales of £14 billion), at the expense of the businesses that employ or are run by our friends, family members, and neighbours would spell terrible things for the future of Huddersfield.
