The government should write off £1.7bn worth of Covid loan debt if thousands of small businesses shopkeepers are not going to go to the wall.
Independent high street businesses now owe four times as much as they did a year ago, with firms owing a total of £1.7bn, said Bill Grimsey, ex-boss of supermarket chain Iceland and DIY chains Wickes and Focus DIY.
According to Grimsey, small shops have survived the pandemic by borrowing, but are now faced with the task of paying it back. He called for a government “forgiveness scheme” to write off taxpayer-backed loans for viable small businesses.
Unless the government steps in, the UK could face a “tsunami” of shop closures this autumn, the veteran retail boss said.
Grimsey pointed out that France is working on ways to help its small businesses get out from under the mountain of Covid debt.
Former chancellor George Osborne has also said the government should just write off small business Covid-19 financial support, while the Federation of Small Businesses said Bounce Back Loan debt should be converted into employee ownership shares.
“Independents have experienced a newfound appreciation during lockdown,” he said. “But they’ve also had to take on government-backed loans they would not have normally been able to get. Now they are struggling with a mountain of debt and need help.”
The latest Vanishing High Street report highlights the need for urgent action to reform the business rates system to encourage young online entrepreneurs to reach the high street. Many believe the rates unfairly place the tax burden on shop-owners.
“Britain is at a crossroads and the pandemic has brought about sweeping changes that will make a decisive break with a traditional High Street model,” Grimsey warned.
“But we can’t build our way out of trouble. To unlock the potential of our high streets, we need to focus on people, partnerships and communities as well.
“Britain needs a social recovery to lock in an economic one and our High Streets should lead by example.”