New tier 4 restrictions could be the ‘final death knell’ for businesses unless the government increases support
Prime Minister Boris Johnson cancelled Christmas plans for millions of businesses and people this weekend with the introduction of tougher new restrictions for large parts of the South East, including London and East of England.
The tier 4 rules, which came after a spike in cases caused by a new variant of Coronavirus, has forced all non-essential businesses to close and asked people to stay at home unless making an essential journey or for exercise.
Industry bodies have criticised the government for the short notice of the new measures, which could have a devastating impact on companies – particularly the self-employed and small businesses.
The Federation of Small Businesses (FSB) is urging the government to step up support for businesses in the affected areas. Martin McTague, vice-chair of the FSB said that once again, many will find their income “disappear literally overnight.”
Tougher restrictions mean businesses need better support
“Whenever new restrictions have been imposed, the government has conceded that emergency support must be provided. This sudden intensification of restrictions demands an intensification of the emergency support package required, and it must be delivered now”, he added.
Health Secretary Matt Hancock warned it is “impossible” to know how long the tougher new restrictions will be in place for and could go on for the next few months, while the vaccine is rolled out.
Liz Barclay, BackinBusiness.org.uk CEO, said: “The new tier 4 restrictions will be a final death knell. For many independent retailers, pubs, restaurants and tradespeople, trade over the Christmas period is a sixth, even a quarter, of their annual turnover and would have determined whether they survive or not.
“If these tough new measures are going to continue into the new year, the government must offer more support to affected businesses. The current Job Retention Scheme and the Self-Employed Income Support Scheme do not go far enough. Small businesses are the backbone of the UK’s economy. If we don’t support them through this crisis, there will be no-one left to drive our recovery.”
‘Self-employed need just as much protection’
Last week, Chancellor Rishi Sunak extended the furlough scheme until April 2021. This coincides with the current end date for the Self-Employment Income Support Scheme (SEISS), which runs until April 2021.
Small businesses often rely on freelancers, contractors and self-employed workers to help them grow, innovate and create new jobs, as this research recently highlighted. But professional bodies are concerned that if tier 4 restrictions continue well into 2021, businesses may not resume projects or invest which could have a knock-on effect on freelancer income.
Andy Chamberlain, director of policy at self-employed trade body, IPSE said: “Too often throughout the pandemic, the self-employed have been an afterthought in government policymaking, receiving later and patchier support. At least 1.5 million self-employed have fallen through the gaps in government support – particularly directors of limited companies and the newly self-employed.
“We urge government to extend SEISS and also finally fix the gaps in it to get support to these still desperately struggling groups. As the extension of the furlough scheme shows, we are far from the end of this and the self-employed need just as much protection and support through the coming months as the rest of the workforce.”