60pc of firms uncertain they’ll survive

MiNiSTerS were last night urged to put more pressure on banks to offer emergency loans, as an official poll revealed just four in ten firms are confident of surviving the Covid-19 crisis.

The Office for National Statistics has gathered feedback from 4,598 businesses over the last two weeks as vast swathes of the economy were taken out of action.

it found almost three in ten (29pc) said they had to reduce staff numbers temporarily during the period from March 9 to March 22, before the uK was locked down.

But despite their desperate efforts to cut costs, just 40pc of businesses surveyed said they were confident could stay afloat during the pandemic.

The poll also revealed that 47pc of firms reported a slump in sales last month, which is likely to get worse as the coronavirus lockdown progresses.

Businesses in the accommodation and food service sectors were particularly hard hit, with 90pc reporting a fall in turnover.

The findings have exacerbated concerns that the new business interruption loans introduced by the Government to help businesses survive the crisis are not being approved quickly enough.

Figures released by the Treasury on Wednesday revealed just 2,500 of these loans, which are interest free in the first year, have been approved by banks since the scheme was launched more than two weeks ago.

Kevin Hollinrake, Tory MP and chair of the cross party Fair Business Banking committee, said the scheme is still ‘not fit for purpose’, and is too bogged down in bureaucracy despite improvements made by the Chancellor.

He said: ‘Banks have to be far more pro active in turning these loans around more quickly to get money into firms’ accounts. Otherwise many of them will go to the wall.’

responding to the ONS report, ed davey, acting leader of the Liberal democrats, called for an urgent review of the loans scheme to ensure more businesses get the support they need.

He said: ‘These figures show the unbelievable strain that businesses throughout the uK are under.

‘The Government has come up with several helpful measures but it seems that some of them, particularly the business loans scheme, are just not getting to the businesses and people that need them.

‘The coronavirus crisis is going to be a painful time for businesses and individuals. The Government must constantly review their polices to ensure they are helping as many businesses as possible.’

Chancellor rishi Sunak announced a major overhaul of the loan scheme last week after a backlash from firms which complained they were being routinely rejected and offered the bank’s own more expensive deals instead.

The Treasury has pointed out that the number of loan approvals and the amount lent have risen sharply since the changes were introduced last Friday.