2021 will be a defining year for the Government’s ambition of securing a greener, more dynamic and competitive UK. But with the health and economic impact of coronavirus hitting hard across the country, ensuring firms’ survival until the economy reopens fully will be key to turning this ambition into reality.
Throughout the pandemic, the Treasury has listened and acted swiftly to offer businesses a lifeline. But with the latest lockdown squeezing cash flow and demand like never before, business resilience is at an all-time low.
In its letter to the Chancellor, the UK’s leading business group outlines the support measures needed in the next few weeks, ahead of the Budget, to help protect UK companies through the Spring. It also recommends actions that should be taken at the Budget itself to build a bridge to a sustained economic recovery by stimulating business investment – with comprehensive reform of the business rates system top of the list.
Ahead of the Budget, the CBI wants to see action on extending the Job Retention Scheme beyond April to the end of June and a commitment to targeted support thereafter to give firms the certainty they need to protect jobs.
Lengthening repayment periods for existing VAT deferrals until June 2021 at the earliest and allow firms to defer Q1 2021 VAT bills due now for twelve months and extending the business rates holiday for at least another three months to those UK firms forced to close under current restrictions and expanding relief to their supply chains.
Tony Danker, CBI Director-General, said:
“The Budget comes at a crucial time for the UK. The Government’s support from the very start of this crisis has protected many jobs and livelihoods, and progress on the vaccine rollout brings real cause for optimism.
“But almost a year of disrupted demand and extensive restrictions to company operations is taking its toll. Staff morale has taken a hit. And business resilience has hit a sobering new low.
“The Government must once again stand shoulder-to-shoulder with businesses to underwrite support for the duration, helping viable enterprises to last the course.
“Many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks. If the Government plans to continue its support then I urge them to take action before the Budget which is still more than six weeks away.
“The Government has done so much to support UK business through this crisis, we don’t want to let slip all the hard work from 2020 with hope on the horizon.
“The rule of thumb must be that business support remains in parallel to restrictions and that those measures do not come to a sudden stop, but tail off over time. Just as the lifting of restrictions will be gradual, so must changes to the Government’s sterling support to businesses.”