Business leaders are calling on the Government to take more ambitious action as the UK faces “the most difficult trading conditions in post-war history”.
In a letter to the prime minister, the president of the British Chambers of Commerce (BCC), Baroness Ruby McGregor-Smith, warns a bolder fiscal plan is needed to avoid mass unemployment, significant levels of business failure and long-term economic scarring.
The sentiments have been echoed by the chief executive of Bristol Chamber & Initiative at Business West, James Durie, who says the compensation on offer is not enough as jobs and livelihoods are being put at risk and existing support schemes are winding down.
The letter from the BCC sets out a series of proposals to help mitigate the worst of the damage to businesses and livelihoods and begin a return to prosperity.
These include the provision of comprehensive support if local restrictions are imposed, an ambitious fiscal stimulus package, including a reduction in the overall cost burden on firms, and restoring business and consumer confidence by improving the test and trace programme.
Backing the recommendations outlined in baroness McGregor-Smith’s letter, Durie said: “Whilst financial support from Government has hitherto been welcomed by the local business community, clearly a bolder and more ambitious fiscal stimulus is required to return us to anything like pre-Covid levels. Even in the wake of an easing lockdown and the gradual reopening of our economy, business and consumer confidence remain weak, dashing earlier hopes of a V-shaped recovery.”
He welcomed the call for a more comprehensive package of support measures for businesses shuttered as a result of local lockdowns, saying: “As it stands, businesses affected are eligible for a payment of up to £1,500. This is simply not enough and will put jobs and livelihoods at even greater risk as pre-existing support measures, such as the furlough scheme, are gradually wound down over the next couple of months.
“Government has so far resisted calls for sector-based support packages for the hardest hit, so it is encouraging to see British Chambers leading the charge and championing the call in the run up to the chancellor’s Autumn Statement.
Durie says businesses will also welcome the call for the prime minister to provide “a single, clear, comprehensive road map for the remaining stages of the pandemic” to enable them to plan, prepare, and, ultimately, survive the coming months.
The letter follows recent research by the BCC, which predicts sustained economic difficulties, with almost a third of businesses expected to make redundancies in the next three months.
Baroness McGregor-Smith states: “Prime Minister, a successful restart of the economy demands bolder and more ambitious action. We face a difficult winter ahead – even without a significant resurgence of the virus itself.
“If the Government wishes to avoid mass unemployment, significant levels of business failure, and long-term economic scarring in our communities, we urge you and your colleagues to act now.”
It highlights that local restrictions are a “single largest blockage” to restarting operations, with BCC research suggesting more than half of businesses (52 per cent) see it as a key barrier.
The BCC argues businesses are not ready to face the triple threat of further lockdowns, an end to government support schemes and the end of the Brexit transition period. The organisation urges the prime minister to take “every step possible to avoid damaging local and catastrophic national lockdowns”, focusing instead on alternative measures.
Main photo by Josh Rundle