Firms plead for more government support as they brace for triple whammy of rising costs
Businesses have pleaded for extra help as they prepare for a triple whammy of costs from tomorrow.
July 19 has been confirmed as the target date for Freedom Day – four weeks later than the original date of June 21.
But vital government support will still taper off from this week despite thousands of pubs, bars, restaurants and nightclubs remaining closed.
Thousands of pubs, bars, restaurants and nightclubs remain closed with July 19 confirmed as the target date for Freedom Day
This ‘triple whammy’ of costs includes the resumption of business rates payments, the end of furlough and the repayment of deferred VAT and government-backed loans.
Industry leaders said more than 200,000 jobs were still at risk. The delay to the end of lockdown looks set to cost the economy £4billion in lost spending, with the hospitality industry taking a £3billion hit.
UK debt warning
Interest payments on Britain’s £2.2trillion national debt pile could rise to a post-war high if inflation surges out of control, a major international banking body has warned.
The Government could end up forking out around £100bn every year on servicing its debt, the Bank for International Settlements (BIS) indicated in its annual economic report, if interest rates were increased to ‘levels in the mid-1990s’ to combat rising inflation.
Currently, the UK is spending around £45billion a year on interest, after borrowing spiralled last year to cover the costs of the pandemic.
Despite this the sector faces a £92million business rates bill in July, and will be asked to contribute to the cost of furloughing staff.
There are 200,000 hospitality staff on full furlough and more than 500,000 on flexi-furlough.
Mike Cherry, of the Federation of Small Businesses, said: ‘Failing to review support deadlines designed with a June unlock date in mind is a false economy.
Unless the Government acts now, it risks a serious economic flashpoint this Thursday.’
Kate Nicholls, at UK Hospitality, said: ‘We’re losing some of our busiest trading weeks. We need business support measures to be extended as long as restrictions are in place.’
And Emma McClarkin, at the British Beer & Pub Association, said: ‘The restrictions staying in place for at least a further two weeks will cost our pubs £200million.’
The positive results of the event pilots has raised pressure on the Government to open up the economy.
The Treasury said firms continue to have support, including grants of up to £18,000 reduced business rates relief and a cut to VAT.