Businesses on the brink of extinction due to lockdowns, say chiefs

Multiple Covid-19 lockdowns have pushed some businesses to the brink of extinction, a new survey reveals.

Richard Sheehan, Shropshire Chamber of Commerce chief executive
Richard Sheehan, Shropshire Chamber of Commerce chief executive

Sobering statistics from the British Chambers of Commerce show that three in five companies have seen revenue from UK customers fall dramatically in the last three months.

And almost a third of businesses admit they will run out of cash in the next three months, with many predicting large-scale redundancies if the Government turns off its financial support in March and April.

Richard Sheehan, Shropshire Chamber chief executive, said: “This report lays bare the impact which Covid-19 has had on our economy, and the knife-edge on which many of our businesses are now balancing.

“It is clear that the effect of multiple lockdowns during the coronavirus crisis have pushed many businesses to the brink, reliant on Government support.”

Shropshire Chamber echoed the BCC’s call to see a clear roadmap for reopening, advancing vaccination and workplace testing plans, and extending key financial support measures throughout 2021.

The survey paints a bleak picture of a business landscape which has been severely squeezed by repeated lockdowns and massive changes in trading conditions.

Results suggest that without the huge amount of Government support given to companies during the Covid crisis, the rate of business failures and job losses could have been much worse.

Mr Sheehan said: “Shropshire businesses are desperate to start trading again so they can begin to build back revenue and start looking to the future.

“It is vital that financial support packages remain in place in the meantime to aid companies through this transition period, as they seek to get their cashflow back on track.

Toll

“With nearly half of all the businesses in this survey saying they still have staff on furlough, pulling the plug on support measures too abruptly could be a catastrophic mistake.”

When asked to rate the effectiveness of the various Government schemes to support their business throughout the crisis, the Coronavirus Job Retention Scheme (CJRS), allowing firms to furlough staff, had by far the highest effectiveness rating.

Other schemes with high effectiveness ratings included Government loan schemes (such as CBILS and BBLS) where 46 per cent rated them ‘very effective’.

Business rates relief, VAT deferrals, and VAT cuts for certain sectors of the economy were also rated as very effective.

BCC director general Dr Adam Marshall said: “The last year has taken a heavy toll on businesses across the UK.

“With cashflow still the top concern, it is vital that the UK Government keeps financial support going until firms can reopen and rebuild.

“Firms need to see a clear, evidence-based plan for reopening.”

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