Business groups welcome furlough extension as ‘survival mode’ kicks in
Business groups have welcomed the extension of the furlough scheme, but warned that the new lockdown means that firms will be back in “survival mode”.
Last night PM Boris Johnson announced a month-long lockdown is to begin on Thursday and last until 2 December.
With just hours to go before the furlough scheme was set to end, ministers confirmed that it would be extended in line with the new lockdown.
British Chambers of Commerce director-general Adam Marshall said: “There’s no getting around the fact that these new restrictions will be a devastating blow to business communities who have done everything in their power to adapt and operate safely.
“The temporary extension of the furlough scheme will bring short-term relief to many firms, and responds to Chambers’ call for business support to be commensurate with the scale of the restrictions imposed.”
However, he added that ministers should confirm the full support open to companies “immediately”.
Richard Burge, chief executive of London Chamber of Commerce, said: “This is a lockdown like earlier this year, regardless of how it’s described, and the financial support given to businesses and workers must reflect that, as we are back firmly in business survival mode.
“Details of the support package must accompany the restrictions when put before Parliament next week. At face value, return of 80 per cent furlough is welcome. Grants must also be made available. Rates must be reimbursed. Bank interest and charges should be suspended and they should be required to offer government-backed loans again.
“It is time for them to deliver the social obligation they are trying to avoid.”
Business set for ‘bleak midwinter’
According to Dame Carolyn Fairbairn, director-general of the CBI, the new lockdown marked the beginning of a “bleak midwinter” for business.
But she praised the resilience of UK industry. “Across the country [companies] have already shown how resilient they can be in the face of tighter restrictions”, she said.
“And thanks to huge efforts by businesses to make workplaces Covid secure, more of the economy can now stay open”.
IoD director-general Jonathan Geldart also welcomed the furlough call, but warned that the new restrictions would “put great strain on an already fragile business community”.
He added that it was crucial that the government also extended the suspension of wrongful trading rules to protect business owners.
All four urged officials to use the month-long period to sort out the problems with the Test and Trace system.
“This could be a key weapon in the fight against the virus, but it hasn’t hit its target yet”, Geldart said.
“The Prime Minister’s emphasis on this is welcome, but the results on the ground will matter most.”