Business chiefs urge Rishi Sunak to extend furlough and Covid loans
Business chiefs warn Rishi Sunak one in four firms will make staff redundant if he does not extend furlough as they warn ‘pulling the plug’ now would be a ‘huge mistake’ because lockdown finishing line is now ‘within sight’
- Furlough scheme is due to end in April and loan schemes closing end of March
- Business leaders warned one in four firms will axe staff if support not extended
- British Chambers of Commerce said ‘pulling plug’ would be a ‘huge mistake’
- Chancellor Rishi Sunak will set out next steps for economy at Budget on March 3
Business chiefs have warned Rishi Sunak one in four firms will make staff redundant if he does not extend coronavirus financial support beyond March and April.
A survey by the British Chambers of Commerce found that three in five companies have seen revenue from UK customers fall in the last three months while almost a third of respondents said they will run out of cash in the next three months.
The BCC is calling for furlough and the Government’s business loans scheme to be extended, with director general Adam Marshall telling the Chancellor it would be a ‘huge mistake’ to ‘pull the plug’ on support now.
Mr Marshall said the end of lockdown is now ‘within sight’ and Mr Sunak must act at the Budget on March 3 to ensure firms make it ‘over the finish line’.
He also warned a failure to help businesses in the months ahead would mean the billions of pounds already spent on propping up firms would have been wasted.
The Government’s furlough scheme is due to run until the end of April while struggling businesses have until the end of March to access loan schemes.
Chancellor Rishi Sunak is under growing pressure to extend coronavirus financial support for businesses ahead of the Budget on March
A survey conducted by the British Chambers of Commerce found that one in four firms is planning axe staff if support is not extended
The Office for National Statistics said earlier this month that over the whole of 2020 the economy dived by 9.9 per cent – the worst annual performance since the Great Frost devastated Europe in 1709
Ministers have been borrowing record amounts of cash during the coronavirus crisis to prop up UK plc.
Official forecasts from the Office for Budget Responsibility (OBR) predict borrowing could reach £393.5 billion by the end of the financial year in March, which would be the highest seen since the Second World War.
Mr Marshall told the BBC’s Radio 4 Today programme that Mr Sunak must continue to splash the cash for a little while longer.
Told that the Chancellor had already given vast sums to businesses, Mr Marshall replied: ‘That is exactly right and pulling the plug now would be a huge mistake because it would be akin to writing off the billions that have already been spent helping firms survive and preserving jobs.
‘I liken this to a marathon. Businesses have been running it and they are in the 25th mile right now, they can see the finish line ahead.
‘You want to get them over the finish line and then you want to get them an energy drink and a blanket to help them start to recover.
‘That is why extending the schemes is so important. You don’t want them falling within sight of the finish line.’
Mr Marshall said every sector of the economy is likely to be facing redundancies in the coming months.
He said: ‘Business to consumer firms are the hardest hit, very definitely, but truthfully it is right across the economy.
‘Firms are thinking about redundancies, they are thinking about reductions of staff hours and they are thinking about cancelling recruitment or investment plans.
‘That is not where we want to be when we are looking towards the reopening of our economy.
‘We need to see confidence engendered and that means the Chancellor extending the support available to businesses beyond the current cliff-edge in March and April.’
He said that hospitality, retail and city centre jobs had been particularly badly hit by the pandemic with many firms now facing ‘tough decisions’.
‘If they knew that Government support was going to be there as we reopen and as we get the economy back on its feet, I think more of those jobs could be saved and that will also help the economy take off more quickly over the coming months as it reopens,’ he added.
Just over a quarter of businesses polled by the BCC said they have enough cash to last more than a year.
A graph showing the number of people in the UK who have been unemployed or furloughed for more than six months
A graph showing how many people have had some experience of unemployment of furloughing over the past year
When asked what their business might do if the Government support schemes end in March and April, one in four said they would make staff redundant, a similar number would reduce staff hours and one in 20 would cancel or reduce investment or recruitment plan.
The survey came as a think tank report found nearly two million people have been unable to work for at least six months after losing their jobs in the pandemic or being placed on furlough.
The Resolution Foundation puts the figure at 1.9million – compared to official statistics showing 1.2million.
It says one in five of these people fear they will remain jobless or their roles will vanish when the taxpayer-funded furlough scheme stops on April 30.
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