“Freedom” in the UK may be further away than planned. Prime Minister Boris Johnson announced a formal delay to the easing of lockdown restrictions, moving what has been dubbed ‘freedom day’ on the 21 June by a minimum of four weeks. Many UK business owners see this as a huge setback as the British public look forward to a return to life before Covid. Businesses are levelling criticism towards the Government for lack of clarity on what this means for various sectors dependent on public footfall, or the extension of support schemes like the furlough and business rates relief, adding pressure on Chancellor Rishi Sunak.
While businesses wait for definitive answers, government sources have told the BBC that most coronavirus rules are expected to remain in place in England for another four weeks after the planned 21 June unlocking. The travel, hospitality and events industries are particularly hit by this potential delay, but concerns over an impending end to the furlough scheme is a cause for concern for microbusinesses in particular, who are struggling to stay afloat with layoffs from their already tiny teams on the horizon.
As the June reopening hangs in the balance, new research from iwoca shows that a third of SMEs have fewer customers, and a quarter make fewer sales. A further quarter of small businesses reportedly lose over an hour each day making their businesses ‘COVID-secure’.
”A further delay is unthinkable, especially for a small one-woman business like mine, operating in the travel industry,” says Kim Rix, managing director at Gemstone Detective. She set up her business in 2018, as a unique learning platform for gemstone enthusiasts and hobbyists. Travel here is crucial for Kim to run her business. ”Suffice to say, my travel business has suffered greatly, not to mention, I’ve had no support from the Government for being a Limited company.”
“Any delay to the current roadmap will be devastating for many small businesses, who are barely holding on already,” Dr Shungu Hilda M’gadzah, director and DEI Lead Consultant Psychologist at Inclusion Psychologists Limited says. “The Government needs to stop sitting on the fence and be clearer in its communication and decision-making.”
“For businesses struggling to maintain cashflow, any delay in the easing of lockdown could be the final nail in the coffin.”
The lack of clarity has been a major source of distress for small business owners, especially for wedding planner Ali Fleming.
“This Government is barking mad,” she says. Ali’s Derbyshire-based family events business, Cariad Personal Ceremonies, has been keeping up with the ever-changing rules around event gatherings since the UK’s series of lockdowns began last year. Being on the right side of the law means having to make peace with the Government’s benchmark for what is considered an acceptable large gathering. ”Thousands of people can turn up at football matches and motor racing events but weddings, with significantly fewer attendees, are seen as a clear and present danger. Boris Johnson needs to listen to the sobbing I hear over the phone daily, as people once again have to reschedule their big day.”
For DJ Mark Green, this is an absolute travesty. The Harrogate-based professional wedding and events DJ has had to put his business on hold throughout 18 unpredictable months, and now fears that the future of the industry may be at threat. “Any delay to the easing of lockdown will be a huge blow to all the weddings and events I’m involved in over the coming weeks,” he says. “If there is a plan to delay, we need Government guidance immediately, so we can react and manage the situation effectively. We need decisive decision-making from the PM, not dithering.”
Further delays to lockdown easing will cause countless problems for businesses up and down the country, warns Jo Ferreday, managing director of corporate hospitality company, Sheer Edge. ”At the current rate, big parts of the hospitality sector could disintegrate before our eyes,” she says. “We need clear, concise guidelines from the Government, nothing wishy-washy and ethereal.”
”Give us a clear plan, spell out what it means to the businesses affected, and reveal what support will be available.”
Jo Ferreday, Sheer Edge
More than ever we need robust leadership right now, she adds. “It’s all about building confidence, among affected business owners, their staff and the public as a whole. Any hesitancy or unclear messaging won’t help at all with that.”
Further pressure on the hospitality industry can cost millions, says Craig Bunting, co-founder of independent coffee brand, BEAR. “(This) puts jobs at risk and further creating a narrative of uncertainly, which in turn removes consumer confidence,” he adds. “I support the call for the Chancellor to extend the business rate relief for the entire year to aid recovery.”
“Further delays to the easing of lockdown will be another hammer blow to the uk population. The entertainment, hospitality and events sector seems to have been left behind while the rest of the country seems to be back to a relative normal.”
Paul Neal, Mortgage advisor at Missing Element Mortgage Services
Kate Underwood, managing director at Kate Underwood HR and Training shares this concern for the hospitality sector. “As someone who supports small businesses in many sectors, any decision to delay June 21 will definitely have an impact,” she says. ”What’s important is that decisions are made quickly so as not to cause further problems.”
“Working with several hospitality and events companies, I know a delay could mean redundancies if an annual event is cancelled that is a year’s worth of work gone up in smoke. Those businesses will need additional Government support.”
A lesser known industry facing severe setbacks from the delay is the herpetology breeding sector. Malcolm Baker, breeder at Halo Dart Frogs fears a delay in releasing the lockdown measures will have a devastating effect on his business as it relies on reptile shows and exhibitions to legally show and sell animals. ”Since March 2020 when the pandemic struck, we have not been able to sell them and this has had major knock-on effects throughout the industry; on pet stores, equipment manufacturers and specialist couriers, that has forced many to close up shop completely.”
“While I agree that something needs to be done, I am concerned that there may not be any extra support for small businesses that are helping the economy to grow, and with the summer season approaching, many of us see this time of year as our life line.”
Laura Light, Savings 4 Savvy Mums
Despite the price many SMEs are paying due to COVID and the delays to ‘Freedom Day’, iwoca research shows that many are bouncing back. Almost a third of SMEs they suveyed are now trading more than they were pre-crisis, up from 11% in December last year. Again, clarity around the UK ‘reopening’ will be critical for their continued recovery.
Concerns abound especially because the Treasury appears to be resisting any extension of the furlough scheme, says Nigel Morris, employment tax director at MHA MacIntyre Hudson. Refusal to adapt the timetable for phasing out the furlough scheme will be self-defeating, he adds. “The Chancellor ought to adapt the wind-down of the furlough scheme in light of the delay to Freedom Day in order to save jobs and livelihoods. This is especially true in sectors such as hospitality and tourism which were waiting on 21 June to fully reopen their doors again. Unfortunately current reports suggest the Treasury is resistant to any change of plan,” he says.
“The Chancellor does not need to change the end-date of the scheme but just the phasing.”
Nigel Morris, MHA MacIntyre Hudson
Keeping government contributions at 80% throughout July - instead of going ahead with the proposed reduction to 70% support for businesses with a ‘mandatory’ 10% employer contribution - would be an enormous help given the delay to Freedom Day, Nigel explains. Instead, the reduction to 70% government support should now start in August and the further 60% should begin in September.
“Although it is sadly true, for some businesses the furlough scheme is just delaying the inevitable. However, there are many more companies and sectors where furlough is still a real life line which is enabling them to get by until they bring back all of their staff to work their normal hours. An end to furlough or a reduction in the money businesses can claim under the scheme when the income still isn’t coming in for them will lead to inevitable consequences and job losses. The Chancellor needs to show flexibility in the face of this set back.”