New ‘body blow’ for Swindon businesses as UK enters third national lockdown

January 5, 2021

The latest lockdown will be another “body blow” to Swindon firms, coming after the uncertainty caused by Brexit and lost trade in the run-up to Christmas, the region’s biggest business group warned today.

Business West, which runs the Swindon & Wiltshire Initiative, said firms that had survived so far with Covid-related support from the government must not now be allowed to fail. 

The group, which was commenting ahead of the new package of measures announced by Chancellor Rishi Sunak this morning, said businesses would understand why the Prime Minister had felt compelled to act on the spiralling threat to public health.

But its managing director Phil Smith, pictured, added: “They will be baffled and disappointed by the fact that he did not announce additional support for affected businesses alongside these new restrictions.

“The lockdowns are a body blow to our business communities, hard on the heels of lost trade during the festive season and uncertainty linked to the end of the Brexit transition period.

“Tens of thousands of firms are already in a precarious position and now face a period of further hardship and difficulty.”

He said billions of pounds had already been spent helping good firms to survive this unprecedented crisis and to save jobs.

“These businesses must not be allowed to fail now, when the vaccine rollout provides light at the end of this long tunnel,” he added. 

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

“Enhanced support for businesses, a turbo-charged vaccine rollout, and delivery of existing promises on mass testing must be delivered to enable the UK to restart, rebuild and renew.” 

Mr Sunak said businesses in the retail, hospitality and leisure sectors would be able to claim one-off grants worth up to £9,000 at a cost to the Treasury of £4bn.

Some 600,000 business across the UK are likely to benefit, he said. The funding will be available on a per-property basis.

A further £594m will be made available to councils and devolved nations to support businesses not covered by the new grants.

Mr Sunak, pictured right, said: “The new strain of the virus presents us all with a huge challenge – and, whilst the vaccine is being rolled out, we have needed to tighten restrictions further.”

He said the new financial support would help businesses get through the months ahead, adding “crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen”.

The help is in addition to business rates relief and the furlough scheme which has been extended until the end of April.

All non-essential shops, leisure and entertainment venues are now closed across the UK, with pubs and restaurants allowed to offer takeaway food only. 

The Institute of Directors (IOD) welcomed the new grant package, saying it would go some way to reassuring the worst affected businesses.

South West regional director Robert Lloyd Griffiths, pictured below, said: “Here in the South West, where the hospitality and tourism sectors have been particularly hard hit by the pandemic, it will hopefully help soften the blow of this third lockdown. 

“We are particularly pleased the Treasury has taken on board our recommendation to increase the discretionary local authority grant fund.

“This policy has helped to reach those who haven’t been able to access other support. The government should be prepared to top up the fund if necessary.”

But he said the Chancellor must “remain wary” of a spring cliff-edge in business support as the furlough scheme and other support measures unwound.

“Businesses will also be keen for the government to continue setting out its plans for the vaccine roll-out to support their planning,” he added.

“The path of the virus is extremely uncertain, and government must be agile in its response to prevent lasting economic damage.”

British Chambers of Commerce (BCC) director general Adam Marshall also welcomed the new support for business but said it was not going to be enough to save many firms.

“We need to see a clear support package for the whole of 2021, not just another incremental intervention,” he said.

“The government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.

“Many smaller firms won’t qualify for the full headline amounts set out in the Chancellor’s statement and will be left struggling to see how this new top-up grant will help them out of their cashflow problems.

“Support must be sufficient to cover not just those on the front line of retail, hospitality and leisure, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions.”

The Office for Budgetary Responsibility (OBR), the government’s independent forecaster, predicts the pandemic will have shrunk the UK economy by 11.3% last year – the biggest decline in 300 years. It expects unemployment – which hit 4.9% in the three months to October – to peak at 9.7%.

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