The full emergency lockdown is a devastating blow for companies large and small that have already had to cope with months of disruption since the pandemic took hold in March.(Bloomberg Photo)
The full emergency lockdown is a devastating blow for companies large and small that have already had to cope with months of disruption since the pandemic took hold in March.(Bloomberg Photo)

UK businesses plead for help after latest England lockdown

Industry groups representing retail, pubs and auto makers are pressing the government to help avert business failures by extending tax relief to companies, giving grants and assuring that the current program to support furloughs will be continued beyond April. EasyJet Plc and Next Plc signalled the new lockdowns are clouding their outlook.
By Bloomberg| Posted by: Harshit Sabarwal
PUBLISHED ON JAN 05, 2021 02:29 PM IST

Businesses are calling for more support and relief measures after UK Prime Minister Boris Johnson plunged England back into full lockdown in a bid to stem the surge of Covid-19 infections.

Industry groups representing retail, pubs and auto makers are pressing the government to help avert business failures by extending tax relief to companies, giving grants and assuring that the current program to support furloughs will be continued beyond April. EasyJet Plc and Next Plc signalled the new lockdowns are clouding their outlook.

The full emergency lockdown is a devastating blow for companies large and small that have already had to cope with months of disruption since the pandemic took hold in March. Britain’s retail and hospitality businesses are likely to be the hardest hit as all non-essential shops, restaurants, and bars will have to stay closed.

“A wave of business failures is imminent unless a greater package of financial support from the government is given to secure pubs and the brewers that supply them,” said Emma McClarkin, Chief Executive Officer of the British Beer & Pub Association. The latest lockdown follows an “abysmally quiet” festive period.

UK clothing retailer Next said Tuesday that recent gains from the holiday period will almost entirely be eroded by the new lockdown. Already, 178,000 jobs have been lost in the retail industry and more could go without additional support, according to Helen Dickinson, CEO of the British Retail Consortium. The group is calling for the government to extend business-rates relief, a form of property tax, from April.

The consequences of restrictions announced late Monday could be “severe” for businesses that yet again face losing 2 billion pounds ($2.7 billion) per week in sales, Dickinson said in an emailed statement.

The new measures, while vital to fight the pandemic, will worsen an already difficult situation for the country’s aviation and automotive sectors, according to Stephen Phipson, the head of Make UK, an industry body for manufacturing and engineering companies.

“Businesses are taking on substantial debt, deferring tax bills, postponing mortgage payments and facing empty order books; this cannot continue indefinitely,” Phipson said in an emailed statement. “The government must now bring forward a comprehensive plan for the next six months that provides certainty, stability and confidence including targeted support for critical sectors.”

EasyJet said late Monday that it would review its schedule, aiming to maintain “essential” connections between key UK cities alongside a small number of international routes. The company repeated an industry call to adopt rapid testing as a way to keep passengers moving. The Times of London reported that the government would require a negative coronavirus test for travellers to enter the country.

Although billions have already been spent helping firms survive, businesses cannot be allowed to fail now when the vaccine rollout “provides light at the end of this long tunnel,” according to Britain’s Chambers of Commerce.

“The financial support for businesses needs to be stepped up in line with the devastating restrictions being placed on them,” said Adam Marshall, director general of the chambers of commerce. “Otherwise, many of these firms may simply not be there to power our recovery when we emerge once again.”

Richard Burge, CEO of the London Chamber of Commerce and Industry, also said urgent help is needed at a time when business confidence at its lowest point since the financial crash in 2008.

The Federation of Small Businesses said support is “plainly insufficient.”

“There must now be a step change in support to equal the compensation offered during the first lockdown,” Mike Cherry, national chair of the federation. “The level of government grants is off the mark by an order of magnitude.”

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