More support needed as England exits lockdown, say business leaders

covid business closed

Business leaders have told Boris Johnson that his roadmap for exiting the third Covid lockdown in England remains incomplete without fresh financial support for companies and workers hardest hit by the pandemic.

The prime minister promised the government would “not pull the rug out” from under struggling firms and workers while restrictions remain in place during the phased relaxation of lockdown, but to the disappointment of company bosses and trade unions he deferred details of future economic support to the budget in 10 days’ time.

Tony Danker, the director general of the CBI, a business lobby group, said: “The budget is the second half of this announcement – extending business support in parallel to restrictions will give firms a bridge to the other side. This is particularly needed for sectors who will have to wait for up to three months to reopen and have an anxious 10 days ahead before the budget.”

With a phased reopening playing out over four key stages between March and June, the roadmap keeps many firms closed beyond the planned end of the furlough scheme at the end of April. Frances O’Grady, the general secretary of the TUC, a trade union umbrella body, said ministers needed to stop “dithering and delaying” and announce an extension of the wage subsidy scheme until the end of 2021 at least. About 4.5 million workers are believed to be on furlough during the latest lockdown, down from about 9 million during the first wave.

“With jobs and livelihoods hanging in the balance there is no reason to keep workers and businesses waiting,” she said.

Under the plan, cafes, pubs and restaurants will be allowed to serve customers outside from 12 April at the earliest. Non-essential retail, gyms, hair salons, and overnight stays in self-contained accommodation could also reopen then. Hospitality indoors would not be allowed until 17 May at the earliest, while nightclubs and theatres are to remain closed until at least 21 June, when all legal limits on social contact are hoped to be removed.

Several major decisions affecting business and the economy – including the return of international holidays, changes to working-from-home guidance and whether Covid-status certificates could be used – are also subject to four major reviews Johnson said would be completed later this spring. In line with the guidance on limits on social contact, offices across England will remain empty until June at the earliest.

Under pressure to offer more support while tough measures remain, the prime minister dropped a heavy hint that assistance would come in the budget on 3 March. “We will not pull the rug out. For the duration of the pandemic the government will continue to do whatever it takes to protect jobs and livelihoods across the UK,” he told the House of Commons.

But the Labour leader, Keir Starmer, attacked the delay. “It won’t have escaped businesses that many of them will not be able to open until mid-April at the earliest and many until mid-June,” he said.

“Health restrictions must be accompanied by proper economic support. It makes no sense today to announce businesses will be closed for many more weeks and months, without economic support. Businesses are crying out for that certainty and the prime minister should give it to them today.”

Companies facing the longest timetable, including those in retail, hospitality and leisure, said many would struggle to survive. Kate Nicholls, the chief executive of UKHospitality, said the sector was “devastated” that reopening was so far away. Although outdoor trade is planned for April, only 40% of hospitality firms have outside space, she said, meaning many would stay shut until rules allow customers indoors, from May at the earliest. “The chancellor has just nine days to save thousands of businesses and hundreds of thousands of jobs that simply will not be there without a substantial package of compensation,” she said.

The British Beer and Pub Association said the “cautious” reopening would cost pubs £1.5bn and that just 17% of the industry’s capacity would be able to open from April. Emma McClarkin, the chief executive of the trade body, said support at the budget to plug this “black hole” was needed. “The prime minister said he will not pull the rug out and do whatever it takes. We will hold both him and the chancellor to this.”

Representatives from the trade questioned the evidence for infection rates in hospitality, while Sacha Lord, Greater Manchester’s night-time economy tsar, said pubs in typically working-class urban areas would struggle most. “It is once again the working class who are hardest hit by the decisions coming from Westminster during this pandemic,” he said.

The long period before reopening is a concern for hotels, said James Mason, the chief executive of tourism agency Welcome to Yorkshire, adding that the government’s announcement left many questions unanswered for businesses that depend on visitors.

“Some businesses are thinking: shall we call it a day? They have been thinking about this for weeks and they are still in limbo,” Mason said. “Some are thinking: shall we call staff back, shall we start planning marketing and our summer?”

Non-essential retailers said they were disappointed to miss out on Easter trade as they would not be allowed to open until 12 April at the earliest. Andrew Goodacre, the chief executive of Bira, which represents thousands of independent retailers, said: “Whilst it is good for us to have a date, we are very disappointed that non-essential shops will miss the Easter period, especially as they also missed out on most of the busy festive period.

“We therefore want the chancellor to recognise this in the budget next week and make clear statements about the support that will be available for the next 12 months.”

Despite frustration over the lengthy timetable for reopening, company bosses said they recognised the need for caution because it could boost consumer confidence once venues reopen, and prevent a fourth wave of the pandemic and return to lockdown. However, firms need urgent support as they fight to make it through the summer.

Mike Cherry, the national chairman of the Federation of Small Businesses, said: “On one side of the coin we have continued restrictions – on the other, we need corresponding business support.”