The coronavirus lockdown – and the government’s mistakes – will scar people’s finances for years

The benefits of consumers seeking to spend the income saved during the last few months will be outweighed by the millions who have faced financial loss, writes Thomas Smith

High streets across England are starting to re-open in earnest (AFP/Getty)

A welcome new dawn is slowly rising on high streets across the country as they reopen, with retailers allowed to operate while adhering to strict social-distancing rules. The end of dormancy will come as a relief for all small and medium-sized enterprises (SMEs), who will now attempt to recover from the seismic losses – in terms of finances and personnel – incurred as a result of the UK’s lockdown.

The novel coronavirus (Covid-19) has infected a known 300,000 people in the United Kingdom and has claimed the lives of more than 42,000. That the spread of the pandemic and resultant deaths in the UK is a tragedy is unquestionable. However, as the UK gradually begins to untangle itself from its self-imposed restrictions and the lockdown-driven economic costs come to light, scrutiny of the government’s strategy is bound to step up as people across the country face a significant financial hit.

The unfortunate plight of UK businesses is clear: amid the backdrop of the worst-recorded decline in GDP in April (a huge 20.4 per cent) and the UK spending an estimated £14bn per month on its job-retention scheme, small businesses have endured huge hardship. The sombre revelation that the reaction to Covid-19 will cost SMEs an estimated £70bn – almost £12,000 per average business – provides an indication of the massive losses inflicted.