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Summary
- UK's main business lobby has urged the government to extend its furlough jobs support scheme and holidays on taxation.
- The government should intervene to help the businesses devastated by the coronavirus pandemic.
UK business organisation Confederation of British Industry (CBI), consisting of nearly 190,000 businesses, fears that several thousands of small businesses could collapse and rupture the domestic economy because of uncertainties due to pandemic. The CBI called on Chancellor of the Exchequer Rishi Sunak to act at the earliest in order to protect the hard-hit firms.
Although, the annual budget is expected to be out in the first week of March, the virus-hit firms are not in a position to wait for this period. The UK has turbocharged the vaccination programme, but the increasing number of coronavirus-related cases and deaths are still a cause for concern.
The business owners are currently evaluating their business models, survival plans and associated job roles. They are expected to take some tough decisions in the upcoming weeks. If further help and financial assistance are not offered to virus-hit firms, all the hard work done by the British government to protect the businesses during the peak of unprecedented crisis would go down the drains.
Also read: British firms call upon the government to extend financial support
For instance, the Job Retention Scheme (JRS), popularly known as the furlough scheme, was initially launched to protect millions of jobs in the private sector by financing their wages. The basic eligibility criteria for employers were that their activities should have been adversely affected by the onslaught of the pandemic.
The furlough scheme was renamed as JRS#2 during the third lockdown and has been now extended till end of April. PM Boris Johnson expects to phase out the scheme post April as mass vaccination programme has been accelerated. However, the CBI wants the multibillion-pound support plan to go on till the end of June.
The lobby group has also called for a further extension to business rates levied on commercial property along with taxation holidays in the form of deferred VAT payments. Since the start of the crisis induced by the pandemic, the British government has helped its people in sustaining their jobs and households.
However, with an increasing death rate, disrupted demand and lockdown restrictions are taking a toll on the constituents of the domestic economy. The resilience of the businesses is being tested and the morale of the employees is at an all-time low.
Moreover, experts fear that the current lockdown could slide the British economy into double-dip recession. Notably, the British debt has been soaring as the UK government has spent about £300 billion in emergency measures to protect the domestic economy.
