Second wave restrictions require a second wave of support for small businesses, the Federation of Small Businesses (FSB) has said.
Responding to the PM’s announcement of significant new Covid-19 restrictions in England, FSB national chairman Mike Cherry said: “Small businesses have followed the guidance, protected the health of their staff and customers, and invested in making their business Covid-safe.
“The announcement at the weekend, however necessary, will inevitably leave many small firms facing the bleakest winter they have ever seen and the second deep recession in 12 months. Urgent clarity is needed on how small businesses and the self-employed will be supported through this.
“For the first wave lockdown, FSB encouraged the Government to create financial support schemes for businesses based on three principles – to be as generous as possible, to as many as possible, and as swift as possible.
“We will now need the Government to match this scale of ambition, incorporating lessons learned from earlier this year – a second wave support package to offset the impact of a second wave of restrictions. This will help the country’s small businesses to make it through to the spring and be able to drive the recovery.
“This should include a new set of small business grants worth at least £10k each – including for those in the supply chains of the hardest hit sectors.
“Alongside greater use of grants, there should be an extension of emergency loans – including both the application period and allowing a second application for those who originally applied for a lower amount in Bounce Back Loans than they were entitled to.
“On the extension of the Coronavirus Job Retention Scheme (CJRS), there must be swift confirmation that the 80% of salaries for those furloughed will be publicly funded, and whether the employer will continue to cover the cost of employer National Insurance Contributions and auto enrolment pensions. In addition, emergency measures are required to make it less expensive for those who can do to hire people.
“There should also be an increase to the self-employment support grant, and its scope should be widened to include those left out of previous support packages, such as the newly self-employed and company directors.
“During the first lockdown, the Government provided reliefs on business rates in England, which are a heavy up-front cost for many businesses. Now that the second wave of this crisis will continue into the spring, there should be a 100% Business Rates suspension at least for those with a rateable value below £25k, and help for those with a rateable value up to £51k and beyond.
“Already small business confidence was at rock bottom, with our latest quarterly index finding two thirds (66%) expecting performance to worsen during the rest of the year. The new England-wide restrictions will inevitably worsen this yet further. It is therefore more important than ever to support small businesses and the self-employed through this so they are still there to provide jobs and growth out the other side.
“Small firms have been drained of resource at a time when many will want to take steps to adapt to the changing nature of our relationship with the EU. Adapting to the new arrangements will incur costs for many small businesses, therefore the government should commit to introducing transition vouchers worth £3k each to help small firms cover these extra costs.”