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Time’s Running Out for Chancellor to Secure Small Business Survival

12th February 2021

Recent research undertaken by the Institute for Public Policy Research (IPPR) has determined that more than 500,000 small businesses across the United Kingdom may soon see their cash reserves run dry, affecting the livelihoods of more than nine million employees.

March and April 2021 will be vital months for firms who have sought government support during the COVID pandemic. A variety of relief schemes introduced to aid business survival are set to expire, leaving many dependents feeling incredibly anxious about their futures. 

To combat lack of income during national restrictions, measures such as the furlough scheme, business rates relief and government-backed business loans were introduced last year by the Chancellor of Exchequer, Rishi Sunak.

Other than the prolonging of business loan repayments, there has been no definitive confirmation that these measures will be extended past their current expiration dates in the next few months.

An investigation by the IPPR predicts that hundreds of thousands of businesses have bleak futures ahead unless more support initiatives are introduced.

The think-tank group also restated their belief that businesses should receive grants which are proportionate to their pre-COVID revenue. These suggestions are also backed up by the Federation of Small Businesses (FSB) and British Chambers of Commerce.

Craig Beaumont of the FSB said the cash outflow of paying business rates, without receiving any income, will once more be crippling to firms, describing the situation as the moment which “tips you [businesses] over”.

Furthermore, Suren Thiru, economics chief at the British Chambers of Commerce, views the system as “broken” and believes the government should extend the business rates holiday for at least another year.

The introduction of one-off business grants at the beginning of the year for those in the retail, leisure and hospitality sectors shows that the government is prepared to continue offering financial support. But will these provisional steps be enough to see businesses through Spring as promised?

All eyes will be on Rishi Sunak on 3rd March, with businesses hoping that further support will be announced in his landmark 2021 Budget.

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