The British Chambers of Commerce has written to Boris Johnson urging him to “act now” to avoid “significant levels” of businesses going under.
Baroness Ruby McGregor-Smith, president of the BCC, said the government needed to provide more support for businesses suffering local restrictions alongside a comprehensive stimulus package, including reducing national insurance costs.
Baroness McGregor-Smith wrote: “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.”
The government has extended some Covid-19 support measures, such as awarding grants worth £1,000 to small businesses that find themselves in lockdown, but it has so far resisted calls to prolong the furlough scheme or to extend the availability of state-backed coronavirus business interruption loans beyond the autumn.
The BCC’s full suggested fiscal stimulus package includes:
- Reducing the cost of employment by expanding the National Insurance Employment Allowance for 18 months from £4,000 to £20,000 and raising the threshold for employers’ National Insurance contributions from £8,788 to £12,500
- Rates relief to all of the hardest hit sectors and their immediate supply chains – not just a few
- Extending the CBILS schemes for new entrants beyond the autumn; adapting the scheme to support businesses over a sustained period
- A two-year extension to the £1m Annual Investment Allowance; and that it is broadened to include coronavirus-related investments and investment in training and the transition to net zero carbon emissions
- An expanded Discretionary Grant Fund
Baroness McGregor-Smith wrote: “Despite the chancellor’s recent summer statement, business and consumer confidence remain weak, and there are real difficulties with reopening the supply-side of the economy. The path to October and beyond appears very challenging, as the Job Retention Scheme and CBILS and BBILS schemes close. Rapid further action is required.”
Other recommendations include:
Improving test and trace
It is not yet giving businesses or consumers confidence that the disease can be properly managed without further crippling lockdowns, said the BCC.
More support for local lockdowns
Fear of future lockdowns, whether local or national, is the single largest blockage to reopening, said the BCC, while local restrictions could create a two-tier recovery and break key supply chains. A support package that will help locked down areas must be rolled out in the form of grants and wage support, not additional debt.
Support for hardest-hit sectors
Many leisure providers, said the BCC, cannot either restart properly and/or face dire financial circumstances. According to a recent BCC survey, almost one third of businesses are expected to make redundancies in the next three months.
Publish a recovery roadmap
A single, clear plan for the coming stages would help businesses to plan, prepare and, ultimately, survive.
Co-ordinate the four nations
Creating a grand committee to minimise distinctions between the four United Kingdom nations, and communicating the reasons for variations, would bolster confidence. The current model is undermining business and consumer confidence and distorting business unhelpfully, said the BCC.