Sunak urged to act on Covid business support before Budget

19-Jan-2021 - Last updated on 19-Jan-2021 at 10:24 GMT

Related tags Coronavirus Cbi Business support lockdown

The Confederation of British Industry (CBI) has called on the Government to announce extensions to business support measures in order to ensure the survival of firms until the economy reopens.

CBI director-general Tony Danker says that despite the progress of the Covid-19 vaccine rollout bringing real cause for optimism, business resilience has hit a sobering new low.

In a letter to Chancellor Rishi Sunak, Danker calls for the furlough scheme, business rates holiday and deferral of VAT to be extended until at least the summer.

With regards to furlough, he also asks for a commitment to targeted support thereafter to give firms the certainty they need to protect jobs.

He adds that the announcement of such extensions will be needed in the next few weeks, ahead of the Budget, to help protect UK companies through the Spring.

Danker’s demands match the CBI’s budget submission, which called for an immediate £7.6bn injection from the Treasury as part of a £17.9bn recovery package and a £6bn extension of furlough, as well as extensions and deferrals of VAT bills and business rates.

Additional pre-Budget CBI recommendations include delivering the 'Pay As You Grow' scheme for Bounce Back Loans, including extending capital and interest payment holidays for a further six months; ensuring the Coronavirus Corporate Financing Facility (CCFF) scheme is kept open until the end of June 2021; and announcing details of the successor of the Coronavirus Business Interruption Loan Scheme (CBILS).

It also calls for the Government to work with local authorities to ensure existing discretionary grants are in businesses’ bank accounts by the end of February 2021.

“The budget comes at a crucial time for the UK,” says Danker.

“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.

“If you want to have effective policy, I don’t think you can wait until 3 March. Firms are not going to wait until 3 March before making decisions.”