Targeted, at scale support to help businesses and kick-start demand is urgently needed
The CBI is today (Thursday) urging the Government to accelerate efforts to protect jobs and livelihoods. The fight against inequality and the future prosperity of communities depend on more action being taken to support businesses in the coming weeks.
Firms across the UK recognise and appreciate the scale and speed of Government schemes since the crisis – they have been a lifeline for many. But despite the gradual reopening of the economy, a recession is a certainty and unemployment is rising. The survival of many firms in hard-hit sectors hangs in the balance.
Given the scale of existing initiatives, further action needs to be targeted and efficient. The priority for business is direct, fast support that ensures firm survival and boosts demand across the economy. The main proposals are to:
- Extend grant support schemes for SMEs via local authorities to help local businesses survive;
- Extend Business Rates relief in England to mid-sized businesses in all sectors for the next 3 months to help supply chains recover;
- Immediately defer VAT payments for businesses in 2nd quarter of 2020 to support cashflow and investment;
- Extend the deadline for the Coronavirus Business Loan Scheme beyond August for a further 3 months;
- Kick-start consumer demand through targeted VAT cuts in enabling sectors and reduce Stamp Duty for cheaper homes by increasing the tax-free allowance for 6 months;
- Accelerate local infrastructure upgrades in 2020/21 by increasing funding for local authorities so they can deliver shovel ready green projects and transport improvements.
This package of business support should be backed by a major Jobs Scheme focussed on helping young people into employment, delivered at speed and scale.
Dame Carolyn Fairbairn, CBI Director-General, said:
“The Government’s support of business during the crisis has saved countless firms. But the rising number of redundancies and benefit claimants shows just how hugely damaging this pandemic has been for our economy.
“The survival of many businesses in hard hit sectors still hangs in the balance over the summer as schemes begin to wind down. These firms cannot wait until the autumn for further action.
“The Government has already shown its ability to be bold and decisive. By getting ahead of this tidal wave of economic damage with at scale, at speed, targeted support, it can help businesses survive, protecting the jobs and life chances of a generation.”
The full set of policy proposals are attached and follow a recent letter to the Prime Minister setting out a series of domestic priorities for business.