Covid-19: thousands of UK businesses on the brink

Thousands of small firms across the UK fear they will never reopen as the global pandemic devastates the UK economy.

A Federation of Small Businesses (FSB) survey also found a third of small businesses are considering redundancies; some 40% of them have been forced to close their doors since the beginning of the coronavirus lockdown in March.

More than a quarter of small businesses said they had failed to make or were struggling to make rent or mortgage payments due to the pandemic.

The FSB said that the government’s job retention scheme had been a key lifeline for small companies, with more than 70% furloughing staff to help their business survive. And the vast majority of firms said the ability to partially furlough workers would benefit them as the economy begins to reopen.

The scheme, originally intended to close at the end of July, has been extended until October. From August to October there will be “greater flexibility”, the Chancellor Rishi Sunak has said, such as supporting part-time workers and making employers share some of the costs.

FSB chairman Mike Cherry commented: “The government has stepped-up with a huge range of support for millions of small businesses and sole traders, from income support schemes, to cash grants, to help with accessing finance and business rates breaks.

“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase. The crucial support that’s on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery.”

He said that while the support measures are helping the vast majority they’re not helping everyone. “Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind,” Cherry said.

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