UK businesses plead for more government support after freedom day ‘hammer blow’

·3-min read
A COVID-19 temporary restrictions sign in Old Compton Street, Soho, London. Photo: Vuk Valcic/SOPA/LightRocket via Getty Images
A COVID-19 temporary restrictions sign in Old Compton Street, Soho, London. Photo: Vuk Valcic/SOPA/LightRocket via Getty Images

UK businesses have said they are “bitterly disappointed” by prime minister Boris Johnson’s announcement that "freedom day" will be delayed by four weeks as the government continues to try to curb the spread of the Delta variant, first identified in India.

Boris Johnson's announcement on Monday of a four-week delay to the final phase of lockdown restrictions lifting in England also coincides with the end of government support for many, including furlough support and business rates relief. Businesses have urged that this help be extended.

Johnson told the nation the UK must learn to live with COVID and that the final lockdown restrictions will now be lifted on 19 July, instead of 21 June.

Scientists estimate the new Delta variant is between 40% and 80% more transmissible than the previous dominant strain in the UK and is spreading fast.

“I think it is sensible to wait just a little longer,” said Johnson, adding that “by being cautious now we have the chance in the next four weeks to save many thousands of lives by vaccinating millions more people.”

The Institute of Directors pointed out that at the end of June, the ban on commercial rent evictions will end. On 1 July, employers must start contributing 10% towards furlough costs and 100% business rates relief will taper off to 67%.

Businesses already struggling to survive due to being closed or opening with restrictions will be “bitterly disappointed” with Johnson's announcement, said Federation of Small Businesses national chair Mike Cherry.

Read more: European markets rise as investors digest lockdown extension and positive jobs numbers

He said some small businesses like nightclubs have remained closed throughout the entirety of the pandemic, which means they have gone 15 months without income, all the while doing their best to support their staff.

“Many small firms who have been hanging onto the edge will be left wondering if they can survive further periods of restrictions without additional support.”

He said the business rates 100% relief for the retail, hospitality and leisure sector must be extended and the government should consider writing off spent COVID loans, such as the Bounce Back Loans, for the most restricted businesses.

Watch: What UK government COVID-19 support is available?

Claire Walker, co-executive director of the British Chambers of Commerce (BCC), said the delay to the removal of restrictions “will come as a hammer blow" to businesses.

She said the pandemic had wrought damage to their cashflow and revenue and “it would be extraordinary if we saw government retracting support to businesses now.”

She believes the government must provide further cash grants, at least equivalent to levels provided during the first lockdown, and delay the tapering of government payments into the furlough scheme.

The government should also consider extending the trade credit reinsurance scheme beyond the end of June and work with lenders to ensure that “appropriate forbearance is in place for those who have used government lending schemes and already started to repay their loan without being able to open fully," said Walker.

The BCC has also called for an extension of the VAT deferral scheme.

Meanwhile, Tony Danker, Confederation of British Industry's director-general, said: “Public health comes first, so while a delay is regrettable, it’s understandable.”

Richard Burge, CEO of London Chamber of Commerce and Industry, said businesses should not have to pay increased furlough contribution, "especially those in quiet city centre areas like the City of London that were banking on a return of commuters."

Watch: Lockdown restrictions: What is changing, what is staying the same and why?

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