Last weekend, the boss of the Leon fast-food chain, John Vincent, made some mildly critical remarks about the dangers of extending lockdown any further. Immediately he faced furious accusations that he was endangering lives, putting profits before public health, and only trying to further his own narrow commercial interests. The same fate has befallen any other business leader brave enough to question whether we can keep the economy closed down forever. Surely this is crazy.
Nothing Vincent said was especially controversial. He argued it was “quite possible” Leon could fold “if weeks and months drag on”, as it was losing around £200,000 a week, adding that no one in charge of policy seemed to mind what happened to companies such as his. You can agree or disagree with his assessment, but from the abuse he received on Twitter, it seems as if many people think entrepreneurs are not entitled to any opinion at all.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Three reasons why business leaders should speak up
As a cautious roadmap out of lockdown is unveiled, and with four more months until all the restrictions on businesses are finally lifted in June, surely we need more business leaders to take a stand against keeping restrictions in place longer than we absolutely have to. So far, most have kept their heads down. They are nervous of the reaction, and aware that many people support lockdowns until the virus has been completely eradicated. That needs to change for three reasons.
First, the people running companies are at the sharp end of this crisis. Anyone trying to keep a business ticking over knows the terrible cost that lockdown is imposing. Sure, there is the furlough scheme, and that will now be extended into the summer, and there are soft loans, and rebates on rents and business rates. And yet the cost of maintaining a firm when it’s closed is still horrendous. Furloughs don’t cover the cost of pension and national insurance contributions for the staff kept on. Soft loans might be on easy terms, but they still need to be repaid one day. Premises have to be maintained even if the rates have been deferred and that costs money. After more than a year of opening up and closing down again, many businesses, and the smaller ones with little access to extra capital in particular, are not going to survive. We need business to keep pointing this out. If we only hear one side of the argument, we will keep on making the wrong decisions.
Second, business leaders know better than anyone how to make their premises safe. As Tim Martin argues, it is not necessarily obvious that a pub is more dangerous than a clothes shop in the middle of a packed mall. In truth, it probably depends on a number of factors. The people running a company are best placed to say whether their operations are safe or not, and we shouldn’t automatically assume they are simply putting profits first.
Finally, business leaders are willing to takes chances when they need to. Running a successful business involves constantly balancing risks and rewards. A chief executive has to navigate his or her way through dozens of different possible outcomes, none of which are certain. The best ones are very good at it, and get it right more often than not – if they didn’t they wouldn’t be in business for very long.
We can’t leave the debate about how to get out of lockdown to epidemiologists or civil servants. The specialists will be far too cautious, and ignore all the other costs of locking down. We need more business leaders to speak up – and they shouldn’t be hounded for doing so.
-
Reeves urged to axe stamp duty from UK shares held in an ISAChancellor Rachel Reeves is reportedly considering axing stamp duty from UK shares held in stocks and shares ISAs. What could it mean for your portfolio?
-
Family investment companies explained: how the ultra wealthy shield their money from the taxmanWealthy families are increasingly turning to family investment companies to keep more of their money away from HMRC – but what are these arrangements and how do they work?
-
Yoshiaki Murakami: Japan’s original corporate raiderThe originator of Japanese activism, Yoshiaki Murakami, was disgraced by an insider-trading scandal in 2006. Now, he's back, shaking things up
-
Galliford Try has firm foundations for strong growthBuilder Galliford Try has a finger in a wide range of pies, notably important work in the public sector
-
Card Factory is a stand-out small-cap going cheapIn a digital world, we still value the personal touch. That’s good news for Card Factory, whose unique business model is suited to weather all economic storms
-
How much gold does China have – and how to cash inChina's gold reserves are vastly understated, says Dominic Frisby. So hold gold, overbought or not
-
Debasing Wall Street's new debasement trade ideaThe debasement trade is a catchy and plausible idea, but there’s no sign that markets are alarmed, says Cris Sholto Heaton
-
Europe’s new single stock market is no panaceaOpinion It is hard to see how a single European stock exchange will fix anything. Friedrich Merz is trying his hand at a failed strategy, says Matthew Lynn
-
Should UK schools ban smartphones?The effects of smartphones on young minds are disturbing, with calls for politicians to make school smartphone bans mandatory. Is radical action needed?
-
Are venture-capital trusts worth investing in?Venture-capital trusts are a tax-efficient way to invest in early-stage companies. But are they worth the risk?
