Midlands businesses fear that support measures may not go far enough

While helping businesses with their immediate cashflow, there are fears the support will not help them long term.

It comes as Chancellor Rishi Sunak declared that venues hammered by Boris Johnson's lockdown decision will get one-off grants of up to £9,000 to keep them afloat over the next seven weeks.

Black Country Chamber of Commerce chief executive Corin Crane welcomed further support from the Chancellor following the Prime Minister’s announcement.

The fresh assistance follows a chorus of calls from business groups for more support, including the British Chambers of Commerce who have warned that without it, many faced ruin.

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Paperchase, which has 127 stores and 1,500 employees, has already seen sales hammered by closures at the end of last year. It has filed a notice to appoint administrators from PwC to advise on its insolvency process.

The chain had launched a Company Voluntary Arrangement restructuring in March in an attempt to turn around its fortunes but saw this heavily impacted by the pandemic. It is understood the retailer's decision to move towards administration was particularly driven by poor sales in November and December amid lockdown measures and tiered restrictions.

Typically, November and December trading account for 40 per cent of the company's annual sales. It said online sales had performed strongly but this had not been enough to mitigate the overall impact of temporary closures.

Mr Crane said the specific support offered to some of the worst-affected parts of the regional economy was particularly welcome

He said he measures could be a lifeline for many businesses who were experiencing much longer disruption as a result of the continuing pandemic.

Mr Crane added that several thousands of households across the region remained reliant on leisure and tourism for their livelihoods.

"These people still face uncertainty as businesses across the sector will now stay closed.

“Today’s measures could be a lifeline for many businesses who are experiencing much longer disruption as a result of the continuing pandemic.

“However we need ministers to set out a clear support package for the whole of 2021 – not just until spring, to help businesses of all shapes and sizes survive this very difficult and uncertain year.

“We also have to be guided by the science, and everyone’s health must be of paramount importance. The vaccine programme is a step in the right direction and businesses have already played their part and invested at a time when cash flow is very limited.

“We will continue to be there to help and support our members and businesses across the Black Country, whilst continuing to lobby for financial support for sectors to avoid further mass redundancies and business failures.”

Tony Hague, chief executive of Cheslyn Hay-based PP Control & Automation, said: "Like the last lockdown, many manufacturers will remain open and, in our specific case, we are providing critical outsourcing, assembly and manufacturing services for key clients involved markets such as medical, food processing and packaging, and specific projects in relation to Covid-19.

"My only concern is that if demand dips in certain sectors, some companies may take the decision – based on costs – that it is more effective to furlough staff and close the doors rather than look to operate at a reduced capacity.

"Now, once again, is the time for UK manufacturers to be bold, brave and innovative and seize the opportunities, however challenging the landscape may be.”

Peter Davies, chief executive at Smethwick-based James Lister & Sons, one of the UK’s longest established providers of engineering services and supplies, said: “I don’t think it will change any trading aspects, so long as the overall economy doesn’t dip again too significantly.

“On the flip side, closing the schools will, in my opinion, have a positive impact on reducing the spread of the virus. Whilst it may cause some issues with staff who have childcare responsibilities, I believe it is definitely the right thing to do.

“In fact, we have been ultra-cautious so far. Every time an employee has had a child sent home because there has been a positive case in their school class/year, wherever possible we have sent them home as well. In some cases, they have been able to partly work, in others we have just lost that productive capacity.

“Closing the schools may eventually remove this issue and could make us more efficient as a business.”

British Chambers of Commerce Director General, Adam Marshall said: "While this immediate cash flow support for business is welcome, it is not going to be enough to save many firms. We need to see a clear support package for the whole of 2021, not just another incremental intervention.

“The Government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.

“Many smaller firms won’t qualify for the full headline amounts set out in the Chancellor’s statement, and will be left struggling to see how this new top-up grant will help them out of their cashflow problems.

“Support must be sufficient to cover not just those on the front line of retail, hospitality and leisure, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions.”

Responding to the new lockdown grants for businesses, Councillor Richard Watts, chairman of the Local Government Association’s Resources Board, said: "Councils continue to work tirelessly to support communities and businesses through this crisis. This includes distributing more than £11 billion to 880,000 small businesses through previous grant schemes earlier this year.

“Emergency grants have been a vital lifeline to businesses struggling and worried about the future. With the national lockdown set add further pressures onto businesses, we are pleased that the Government has announced this new scheme."

The British Independent Retailers Association has voiced concerns the Treasury's £4.6bn will not sustain retailers through the new national lockdown in England.

Bira is concerned that, with no confirmed date for reopening, the funding will not be enough to keep retailers afloat and chief executive Andrew Goodacre said: "The extra support cannot come soon enough. And while we certainly welcome the extra money being provided to closed businesses, on top of the existing grants, the problem is that we have no end date to this lockdown.

"Our fear is that this will not be enough to help businesses survive and protect those all important jobs.

"The Government need to keep an open mind and be prepared to offer more support if this lockdown looks like being longer than they envisage at the moment."

Rain Newton-Smith, the Confederation of British Industry's chief economist, said: “The Chancellor has once again moved swiftly to support businesses as circumstances change. It is sorely needed.

“More direct grants will provide some relief to eligible companies’ cashflow.

“Yet with businesses facing a third lockdown, there are other steps that can help provide a bridge to the all-important economic recovery, particularly those affected through supply chains."