Businesses ask for more support as "Freedom Day" is delayed

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Date: 15 June 2021

Chester City centre under COVID restrictions

The Federation of Small Businesses says urgent support is needed for small firms affected by the delay in the lifting of COVID-19 restrictions.

The government has announced a four-week delay to the final stage of the unlocking of restrictions in England. It means that so-called Freedom Day has now been moved to 19 July.

As a result, business groups have raised concerns about the effect of the delay on small firms - especially those in hospitality and leisure - and are calling on the government to provide new support measures. The calls come as business support, including furlough and business rates relief, are due to start tapering off.

Mike Cherry, national chair of the Federation of Small Businesses (FSB), said: "In all our talks with the government during this crisis, we've made it clear that support must be proportionate to the restrictions in place. These business support measures have been critical to saving thousands of businesses and jobs. But we now must push for more, at a time when so many small firms need that helping hand to survive."

The FSB is calling for an extension of the Business Rates 100% relief for the retail, hospitality and leisure sector, currently due to fall to 67% on 30 June. It said the employer contribution changes to furlough that are due to take hold on 1 July should also be delayed until all restrictions have eased.

Claire Walker, co-executive director of the British Chambers of Commerce (BCC), said: "It would be extraordinary if we saw government retracting support to businesses now, given that some firms will remain unable to fully trade and others effectively forced not to trade at all … 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, planned for the start of July. The government should also consider extending the trade credit reinsurance scheme beyond the end of June to minimise possible disruptions in insurance coverage.

"An extension of the VAT deferral scheme and the 100% Business Rates relief for eligible businesses should also be considered given the length of the delay and the impact on hospitality and leisure firms."

Dr Roger Barker, director of policy at the Institute of Directors (IoD), has warned that businesses are approaching a "cliff edge, with government support for business ending or beginning to taper off". He said that "economic support and public health measures must be aligned."

The CBI has also called for the extension of support measures. Director-general Tony Danker said: "Continuing restrictions means the government must urgently revisit the support available. That starts with holding back on the tapering of business rates relief and extending the commercial rent moratorium for those sectors most impacted. A solution must also be found for the hard-pressed international travel sector."

Meanwhile, the Association of Independent Professionals and the Self-Employed (IPSE) has called for the creation of a support and stimulus package specifically aimed at freelancers. "The delay to the easing of lockdown restrictions is another sharp blow to freelancer-dominated industries such as events, the night-time economy and the creative sector, said Andy Chamberlain, director of policy at IPSE.

"These are industries where you can find many of the million freelancers who are still excluded from support and the delay will make matters even worse for them … Although there may be a clear case for delaying the easing of restrictions, government must match this with further and more targeted support to these devastated sectors and the freelancers who work in them."

Written by Rachel Miller.

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