FSB urges Chancellor to throw lifeline amid new lockdown

Commenting on further lockdown restrictions in England, Federation of Small Businesses (FSB) National Chair Mike Cherry said while there is an overarching need to protect public health and bring coronavirus under control, it is disheartening news for small businesses and a blow to an economy that’s already on its knees.

He said restrictions have been a harsh reality for almost a year and this is anything but a fresh start to 2021.

“Today’s 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,” Mr Cherry said.

“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 the 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.

Mr Cherry said he 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.

The plan 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”,” Mr Cherry said.

“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 per cent of private sector employment in the UK. The future economic recovery depends heavily on their survival in this first quarter of 2021.”