Crisis for economy ‘will last at least a year’
GOVERNMENT support to help businesses through the latest coronavirus lockdown must last until the end of 2021, leaders in the South West said yesterday.
Chancellor Rishi Sunak unveiled a new package of support following Monday night’s announcement of the new lockdown. Business leaders in the South West welcomed the £4.6 billion from the Treasury – but said it did not go far enough.
“The Government needs to set out a clear support package for the whole of 2021, which businesses so urgently need in order to plan and prevent mass redundancies,” said Stuart Elford, chief executive of Devon and Plymouth Chamber of Commerce and chair of British Chambers of Commerce South West.
Nationally his organisation predicted a double dip recession.
Hospitality and tourism, the two biggest drivers of the Westcountry economy, have been hardest hit by the lockdowns imposed by coronavirus.
Robert Lloyd Griffiths, regional director of the Institute of Directors, South West, said the Treasury support would help “soften the blow” of a third lockdown for the sector.
But he warned: “The path of the virus is extremely uncertain, and the Government must be agile in its response to prevent lasting economic damage.”
Chief medical officer Chris Whitty told a Downing Street press conference last night that the latest figures showed one person in every 50 in England now had the virus. He said cases of the new variant were rising in every area of the country.
WESTCOUNTRY business leaders have welcomed the Government’s £4.6 billion support package for businesses hit by a third national lockdown – but say it does not go far enough.
Chancellor Rishi Sunak acted swiftly to support sectors forced to close after Prime Minister Boris Johnson pitched England into another shutdown in order to protect the NHS from being overwhelmed by coronavirus patients.
About 600,000 retail, hospitality and leisure sites will be able to claim a oneoff grant of up to £9,000, costing the Treasury £4.6 billion, with a further £594 million for local authorities and devolved administrations to support businesses not eligible for the grants.
However, South West business organisations are already calling for a long-term road map from the Government, and for the Chancellor to extend the support until the end of 2021, or even longer.
For instance, they want VAT and rates relief for hospitality businesses, due to end in March, to be continued and certainty over what businesses can receive support outside of the retail and hospitality sectors, including in the supply chain.
Stuart Elford, chief executive of Devon and Plymouth Chamber of Commerce and chair of British Chambers of Commerce South West, said the Government must commit to a support package for businesses lasting the entire year, and make an announcement before the March 3 Budget.
He said: “While welcome, the new lockdown grant support from Rishi Sunak is not enough. The Government needs to set out a clear support package for the whole of 2021, which businesses so urgently need in order to plan and prevent mass redundancies.
“Mr Sunak must not wait until the Spring budget to help businesses of all shapes and sizes, who have depleted cash reserves, survive this difficult and uncertain year.
“Businesses must not be allowed to fail now when the vaccine roll-out provides light at the end of the tunnel. The Chamber will be doing all we can to fight hard for our businesses.”
Tim Jones, chairman of the South West Business Council, said: “Whilst the latest funding support package from the Chancellor is appreciated, this is very much of a ‘sticking plaster’.
“The accumulative effect of three lockdowns, and the stop/start approach which has now been experienced for the past nine months, has deeply impacted upon the hospitality, tourism and leisure industry.
“There is no doubt that a much deeper support package will be necessary and that this will need to be available for an extended period whilst businesses try and recover and repair their balance sheets. Almost certainly, the Government should consider a period up to the end of the current year.
“To date, also, the effect on busi
‘The Government needs to set out a clear support package for the whole of 2021, which businesses so urgently need in order to plan and prevent mass redundancies’ STUART ELFORD, CHIEF EXECUTIVE OF DEVON AND PLYMOUTH CHAMBER OF COMMERCE
nesses who rely upon the tourism sector has not been fully appraised. This includes many in the retail sector and also numerous local suppliers. These indirect losses are not being recognised. The Government will need to wake up to the fact that the South West has been disproportionately affected by the lockdown programme and market disruption.”
Kim Conchie, chief executive of Cornwall Chamber of Commerce, wants an even longer period of assistance – until March, 2022 – and he is concerned whether businesses supplying the South West’s retailers and hospitality sector will be helped when demand shrinks.
He said: “It’s good that Mr Sunak reacted quickly, but it is not quite clear whether businesses in the supply chain, like those supplying food to hotels, that are not mandated to close but are hugely restricted, are included. So are these going to be discriminatory grants?
“Also, I would like a 15-month programme of support, until the end of the March 2022 financial year.”
He said there should be a VAT holiday, business rates waiver and an extension of the furlough scheme and added: “So let’s have some clarity about businesses in the quirky sectors we have in Devon and Cornwall, and a plan to March 2022.”
Exeter Chamber of Commerce is also concerned about the wider implications of the new lockdown, particularly on jobs, and said in a statement: “The knock-on impact to the wider supply chain is now becoming more severe and has an impact across many sectors from food and farming, to manufacturing, to business services and more.”