“While there is an overarching need to protect public health and bring coronavirus under control, this is disheartening news for small businesses and a blow to an economy that’s already on its knees. Restrictions have been a harsh reality for almost a year, and this is anything but a fresh start to 2021.
“The news of a new tougher lockdown will cause widespread business failure and job loss unless support is provided on an equal scale to these unprecedented curbs on economic freedom.
“Current business support is plainly insufficient – There must now be a step-change in support to equal the compensation offered during the first lockdown. The level of government grants is off the mark by an order of magnitude and has not kept pace with events.
“We now need a new hand-up from Government to help us get through what is fast becoming an enforced closure of much of the whole economy. Schemes such as the business rates 100% relief expire within weeks to be replaced by the next year’s bills landing on the doorsteps of shuttered businesses.
“FSB wrote to the Chancellor just before Christmas with a five-point plan to save the small business community and help it get through the toughest Quarter One of any year that they have ever faced, providing a bridge to a vaccine-enabled recovery from Easter. This includes a full second round of £10,000/£25,000 Small Business Cash Grants, a German-style Revenue Loss Scheme, a Directors Income Support Scheme and help for the more recently self-employed at the same time as the SEISS Grant, and extended repayment and limits for bounce-back loans.
“It must not be forgotten that all this comes at a time where 69% of small businesses are now in debt, with 40% saying the level of debt is “unmanageable”. Many are trying to navigate the UK’s new trading relationship with the EU, which to avoid tariffs adds further bureaucracy and cost pressures. This is why support should be given to small businesses through £3,000 transition vouchers for tech, training or expertise.
“Small businesses are the lifeblood of communities and the economy, accounting for 60 percent of private-sector employment in the UK. The future economic recovery depends heavily on their survival in this first quarter of 2021.”
“Businesses will understand why the Prime Minister has felt compelled to act on the spiralling threat to public health, but they will be baffled and disappointed by the fact that he did not announce additional support for affected businesses alongside these new restrictions.
“The lockdowns announced today are a body blow to our business communities, hard on the heels of lost trade during the festive season and uncertainty linked to the end of the Brexit transition period. Tens of thousands of firms are already in a precarious position, and now face a period of further hardship and difficulty.
“Billions have already been spent helping good firms to survive this unprecedented crisis and to save jobs. These businesses must not be allowed to fail now, when the vaccine rollout provides light at the end of this long tunnel. The financial support for businesses needs to be stepped up in line with the devastating restrictions being placed on them. Otherwise, many of these firms may simply not be there to power our recovery when we emerge once again.
“Enhanced support for businesses, a turbo-charged vaccine rollout, and delivery of existing promises on mass testing must be delivered to enable the UK to restart, rebuild and renew.”