Business needs support that goes hand in hand with new restrictions, not sticking-plaster solutions
Businesses need a shot in the arm to save our economy, writes Lucy Powell MP. | PA Images
3 min read
Businesses are hanging on by their fingertips. We need a proper framework to protect jobs and businesses through this national lockdown and put Britain back on the path to recovery.
Businesses across the country have done all that’s been asked of them to limit the spread of Coronavirus and keep us safe. Yet time and again, economic support has failed to keep pace with the restrictions placed on firms large and small, and that’s one reason why we have the worst recession of any major economy.
The cash crisis caused by many months of lost trade or no trade will push many over the edge.
As we enter the third national lockdown, retail, hospitality and leisure businesses are hanging on by their fingertips, after being shut for many of their most profitable months of the year. Others in forgotten sectors like weddings and events, are teetering on the brink, as overheads mount and income has disappeared.
Through this pandemic, businesses have been crying out for certainty and stability - for a government with a long-term plan to save jobs and livelihoods.
The Chancellor’s last-minute approach has meant record job losses, shuttered streets, and the worst recession of any major economy
Instead we’ve seen Ministers veer from one approach to the next, swinging in the wind, rather than acting as a break to protect our economy against the storm. And we’ve barely seen the Chancellor. He’s been missing in action just when businesses were grappling with new tier 4 restrictions. In his absence, the message from the Business Secretary was blunt: make do with what you’ve got.
The new England-wide lockdown made further support for hard-hit businesses inevitable, yet the Chancellor’s last-minute approach has meant record job losses, shuttered streets, and the worst recession of any major economy. Additional one-off grants will be welcomed by some businesses, but they are a sticking plaster, because they will be worth less the longer this lockdown continues.
Businesses in the supply chain, and in sectors not in line for these grants, also need clarity on how new discretionary funding has been calculated and will be allocated. It is questionable if it will be genuinely based on business need and given to those areas where need is most acute.
Ten of thousands of viable businesses were contributing well to our economy before the crisis. They will do so again when the virus abates. They are vital to our recovery and to creating new jobs to replace the ones this government has lost.
As the vaccine protects our communities, these businesses need a shot in the arm to save our economy. That means a comprehensive long-term plan to see businesses through this lockdown and beyond, to a time when the vulnerable are vaccinated and our economy can reopen.
Instead the government is yet again winding down support in the middle of the crisis.
In the weeks ahead several cliff edges are approaching, including the closure of government-backed business loans schemes, the end of the business evictions ban, the end of the business rates holiday in March, and the end of the furlough scheme in April. It’s impossible for businesses to plan ahead when they don’t know if these will continue or not or how long the one-off grants will last. Their financial position is much worse now that last March, and their cashflow crisis will get worse, if government support doesn’t reflect the reality they face.
Business needs a government that is ahead of the curve, acting as a bridge over the Coronavirus chasm, not leaving them to fall. They need support that goes hand in hand with new restrictions and meets business need. That means an end to the last-minute scramble we’ve seen yet again and the sticking-plaster solutions that emerge from it.
We need a proper framework to protect jobs and businesses through this national lockdown and put Britain back on the path to a better, more secure recovery.
Lucy Powell is the Labour MP for Manchester Central, and shadow minister for Business and Consumers.
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