Lockdown extension ‘will be devastating’ for business

Covid Marshall

A delay to the full unlocking of Covid-19 restrictions will be devastating for businesses and require a comprehensive extension of emergency support to avoid further widespread job losses, the government has been warned.

Employers’ groups said that extensive help would be vital to protect firms if Boris Johnson pushes back the planned June 21 lifting of Covid-19 restrictions at a press conference tonight.

Organisations including the Federation of Small Businesses, UK Hospitality and British Chambers of Commerce said that they were poised to demand help such as loan forbearance, more generous furlough terms and an extension to an eviction ban and business rates holiday.

The hospitality sector would lose about £3 billion in sales from a one-month delay, UK Hospitality said.

Emergency support is due to be phased out, with business rates payments in hospitality set to recommence and higher contributions from employers required for furloughed staff. A moratorium on evictions and debt collection from commercial tenants is due to lift on June 30.

Craig Beaumont, of the Federation of Small Businesses, said: “Changing the road map will be a huge blow to businesses in the night-time economy who have had five quarters of no revenue whatsoever. For everyone else, the chopping and changing makes it impossible to plan and mitigate against the difficulties of restricted trade.”

Spencer Craig, co-founder and chief executive of Pure, a fast food chain, said that the prospect of further delay was “devastating”. He said: “Until the ‘work from home if you can’ order is lifted, there is little chance of our business starting to recover.”

His business had “committed huge amounts of resources in terms of recruitment and marketing” towards the June 21 target, “so the delay means additional losses for us and is incredibly demoralising for the team”.

Claire Walker, co-executive director of the British Chambers of Commerce, said: “We would be calling for the government to provide further cash grants, at least equivalent to levels provided during the first lockdown, and to delay the tapering of government payments into the furlough scheme, planned for the start of July.”

Beaumont said that there was “lots government can do to help” and support measures must include an extension of fully subsidised workplace testing, a delay to the end of the rent moratorium and emergency insolvency protections, leniency over state-backed loan repayments for those whose reopening is delayed and an extension of business rates relief for affected sectors.

He added that the ability to defer VAT is also due to end this month. “A third of those who deferred their VAT have yet to agree a repayment plan. We will be pressing for more support.”

Kate Nicholls, of UK Hospitality, said: “It is imperative that government postpones business rates payments until at least October and extends the rent and debt moratoria for hospitality businesses while a long-term solution to Covid arrears is found.” Businesses needed a swift commitment that such support would be in place.