One-third of employers expect to let go some their staff in the next three months as lockdown measures tighten, according to FSB’s latest survey
As the number of coronavirus cases nationwide continue to rise, the government has announced three-tier lockdown restrictions across the UK, forcing thousands of businesses and firms to shut down in higher tier areas. The National Chair of the Federation of Small Businesses, Mike Cherry, has demanded the government do more to help small businesses survive the harsh winter months with mass uncertainty ahead.
The Job Support Scheme will replace the Job Retention Scheme on November 1, providing further help and support to SMEs across England to help employers retain their employees during this difficult time. However, as the second wave of the pandemic sweeps across Britain, Mr Cherry believes the government needs to step up efforts in order to prevent a surge in job losses.
“The furlough scheme has been a resounding success since March, and has inevitably saved hundreds of thousands of jobs from being lost, Mr Cherry explained. The Government intervened, and rightly so, along with a series of comprehensive measures to safeguard jobs, businesses and the wider economy. But as the second wave of the virus intensifies, the hard work to continue this job doesn’t end here.
“The new Job Support Scheme will be yet another vital lifeline to saving jobs and keeping businesses afloat, many of which remain hopeful for some relief in the run up to Christmas. But with new restrictions being imposed in every part of the country, many of which are set to get tighter in the weeks to come, small businesses face huge difficulties over the winter months ahead.
According to the FSB’s latest Small Business Index study, 30 per cent of employers expect to make some staff redundant in the next 3 months, and one in ten (12%) expect to let go at least a quarter of their staff. The poll surveyed 1,5000 business in the UK.
“That is the scale of concern and uncertainty that small firms are faced with for their businesses, with many letting staff go for the very first time, Mr Cherry added. Small firms are often similar to family units, so this is a huge wrench – often the last step a small business owner will take in order for the business to survive. If we see tougher restrictions, we are asking the Government to dial up the Job Support Scheme even further to provide more support for the small businesses that are not legally required to close but are facing a collapse in consumer demand.
However, Mr Cherry insisted the government should dial up the current Job Support Scheme if restrictions increase, and lend a helping hand to small businesses who are struggling during the pandemic rather than only providing support for firms that have been forced to shut down. Small firms are often similar to family units, so this is a huge wrench – often the last step a small business owner will take in order for the business to survive. If we see tougher restrictions, we are asking the Government to dial up the Job Support Scheme even further to provide more support for the small businesses that are not legally required to close but are facing a collapse in consumer demand.
He also hit out at The Chancellor for neglecting newly self-employed workers and company directors out of the support scheme. Mr Cherry called out the government for failing to support the arts industry, that has taken a massive during the pandemic. “And despite this assistance, there remains little support for the newly self-employed and company directors, and it is critical that the Government addresses these shortcomings urgently in the months to come, Mr Cherry explained. These have had a torrid seven months, especially those in sectors that could not operate properly like events, culture, the arts and tourism. They must be kept going so they can help with a spring recovery.
He added: A million people are expected to enter unemployment rolls over the coming weeks and months, and therefore the onus is on Government to offer new and innovative ways to help uplift people into new jobs.
Mr Cherry also believes the government must help employers by making it more affordable to employ new staff and reduce taxes, so business owners can get back on their two feet and keep operations afloat. He also advised the Chancellor to introduce more schemes to allow SMEs easier access to loans and encourage more entrepreneurs to take a leap of faith and launch a business. “It’s important that we make it more affordable to employ people by reducing the ‘jobs tax’, Employer’s National Insurance, Mr Cherry said. The Government’s business rate review must address and reduce the upfront costs of this regressive tax, which threatens business survival altogether.
He continued: In addition to this we need to see help for those who have lost their jobs and looking to start anew. The Chancellor could consider a Kickstart Start-up scheme, enhancing the current offer of Start-up loans and New Enterprise Allowance to drive up numbers of these new businesses. Small businesses are the backbone of our economy and we must be doing all we can to ensure they have the support they need to make it through the next few months.
Amid fears of a second wave taking a toll on Britain’s economy, the government must continue to support SMEs during these next few months. Many businesses could be left on the brink of survival, making these government-backed schemes crucial in keeping business on their feet.