The nation’s health is key. But safeguarding businesses and jobs is also a priority
The last thing we want is large-scale redundancies and the break-up of teams of people who served their communities well, writes John Redwood MP.
Combatting coronavirus must include financial assistance from the Government to help businesses keep their current staff.
If you are running a hotel, restaurant, bar or pub you want to know how long you will have to survive without customers. Many of these businesses have been built up with great effort and care, bringing together teams of skilled people and nurturing a customer base.
When they heard the Government say that no one should go and spend money with them, it was a body blow.
Of course everyone wants to limit the loss of life and do anything that might work to stop the virus. The issue is, what offsets can the Government offer to those caught up in the collateral economic damage?
The chancellor’s package of measures gives some relief. All hospitality and retail businesses will be exempt from paying business rates for 12 months. Smaller companies with a rateable value of under £51,000 will receive a cash grant of £25,000, and micro businesses will be given £10,000.
Many businesses still face the problem of how to pay the rent, wages and other overheads while they wait for the all-clear to allow them to win back their lost customers.
The Government is offering a range of loans at low rates of interest, with no interest payable in the early months. The stronger and more confident companies may well opt for those, which have to be negotiated from the banking system with the inducement of a Government guarantee.
They still face the twin problems of not knowing how long they will need to go on borrowing before customers return, and of having to repay the loan in due course when they are unlikely to make up the revenue they lost during the period of closure.
Other companies may decide they do not wish to get ever more heavily into debt, and will lay off staff, close buildings and seek a renegotiation with the landlord.
The Government has said it stands ready to improve its offer to avoid more damage to our economic fabric. It should look at schemes which allow businesses to keep their current staff, with the Government paying much of the wages during any period when the advice is no one should use their facilities and skills.
The last thing we want is large-scale redundancies and the break-up of teams of people who served their communities well. They have kept the pubs, clubs, hotels and leisure businesses going in the heart of our towns and cities and in our countryside. Let us hope these tough measures bring early results. Any prolonged period of enforced idleness for more than one-fifth of our economy will put jobs at risk and undermine good businesses.
I am relieved the Government wants to answer the question: how do we keep our businesses going? These sectors that are experiencing the full force of the closures need income. If it cannot come from customers, they need cancelled bills and financial assistance. Without it, their balance sheets soon deteriorate and they will be forced to shed labour.
Sir John Redwood is Conservative MP for Wokingham.
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