Longer-term financial support essential for businesses
key update from John Bridge OBE DL

Many businesses across our area, particularly in Peterborough and Stamford, and across sectors, are on their knees and will be spending Christmas making serious decisions about their future.

All Chambers collectively have written a letter to the Prime Minister today outlining the need for further, long-term business support.

This reiterates that firms urgently need greater clarity, certainty and stability. While they understand that the nature of the pandemic means that things can change quickly, they need a much clearer view of the road ahead, rather than handbrake turn after handbrake turn.

Crucially it says, the impact is increasingly felt away from the sectors which have been most obviously hit by restrictions. It is by no means only events, leisure and hospitality businesses that are in trouble. Support must be in place for firms throughout their supply chains and across the economy.

It states that businesses cannot afford to wait until the Chancellor’s budget in March and the Government must therefore immediately set out a clear plan for 2021 and introduce the following long-term measures to support business cashflow:
  • Extend and expand business rates relief – First, the 100% business rates discount for businesses in the retail, hospitality and leisure sectors in England for 2020-21 should be extended to all businesses whose ability to generate revenues are severely impaired, whether they are mandated to be closed or not. Revenue tests could be used to ensure these are appropriately targeted. Second, the relief must be extended beyond March for the duration of 2021/22 financial year.

  • Increase small business rate relief threshold – to ensure that all small businesses have access to the grant support and relief on business rates no matter where they are located.

  • Offer immediate and more significant cash grant support – the LRGS grant scheme is wholly inadequate for the level of fixed costs many wholly viable businesses face. We have been shown many examples of businesses who are receiving £3,000 per month which does not meet their contractual costs, which they will very soon not be able to meet. Offering immediate, upfront cash grant support – at least equivalent to levels available in the first national lockdown - with sufficient funds to provide for all businesses that need it, would help to ease the cash crisis that many businesses are facing.

  • Extend deferral on VAT – nearly half a million businesses together deferred around £30 billion of VAT up to the Chancellor’s September statement. This has, undoubtedly, been extremely helpful, as has the creation of an interest free repayment plan. But more stability and certainty, and more support, is required. Most importantly the VAT deferral must be extended to at least the end of 2021. Further, the Chancellor should look very carefully at whether the repayment plan can also be extended even further.

  • Improve access to government lending schemes - While the extension to the government backed loan schemes is a welcome step, most firms who bank with non-accredited lenders remain effectively locked out of these vital financial lifelines. Government must work with regulators and banks on solutions to ensure that all eligible firms can access this support to help them weather this challenging period.

  • Support for the businesses and individuals excluded from help – Even at this late stage you have a chance to remedy a huge hole in the support offered, to owner-directors of limited companies, freelancers and others who have fallen through the cracks. Please take it.
At the same time, Government must urgently fix the test, trace and isolate system, providing greater incentives for people to do the right thing and isolate when necessary and enabling consumers and workers to safely return to workplaces and high streets.

Long-term, comprehensive support for businesses who will be the backbone of the economic recovery is not an optional extra. Failure to act now will lead to many more businesses shutting up shop for good and will be a waste of the investment Government has already made to keep firms afloat. We need businesses to survive and to be ready to power the recovery when the time comes. In short, supporting them now, will pay dividends in the future.

You can be assured we will continue to fight hard to ensure businesses receive commensurate compensation for the losses they are incurring through no fault of their own but due to the current rapidly changing circumstances imposed by the government.

You can listen to my interview regarding this with Chris Mann last night on Radio Cambridgeshire here

(the interview starts at 2 hours 47 minutes into the programme) 

Contact the Chamber

01223 237414 •  chamber@cambscci.co.uk
Cambridgeshire Chamber of Commerce
Clifford House • 2 Station Yard • Oakington • CB24 3AH • United Kingdom
www.cambridgeshirechamber.co.uk