// Retail leaders & experts say Chancellor Rishi Sunak’s new business support measures would help retailers from going bust
// However, some cautioned that further work needs to be done by the government & Bank of England
// Business rates holiday now applies to all retailers as part of wider measures to mitigate impact of coronavirus
Retail leaders and industry experts have welcomed the Chancellor’s decision to extend the business rates holiday so it applies to all retailers as part of measures to mitigate the impact of the coronavirus pandemic.
The business rates holiday, which applies for one year, is part of a wider package to help prop up the economy during the coronavirus pandemic, which also includes £330 billion in access to loans as well as increased cash grants for smaller businesses.
Several said Chancellor Rishi Sunak’s measures, first revealed yesterday, would help retailers from going bust.
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However, some suggested more will need to be done by the Bank of England, including quantitative easing and interest rate cuts.
Economists also said measures to support workers – especially renters, who will not benefit from the mortgage payment holiday – are required, although more announcements are expected this week.
The retail industry have been particularly vocal in calling for financial support, after Prime Minister Boris Johnson urged Brits on Monday to limit social contact and stay at home as much as they can, effectively emptying high streets and shopping centres nationwide.
Helen Dickinson, chief executive of the British Retail Consortium, said: “The Chancellor… is to be congratulated for listening carefully to the concerns of retailers and has delivered a big, bold package of measures that will be a huge cashflow boost and will improve confidence for those affected.
“Business rates are a huge burden for retailers at the best of times. The business rates holiday, together with the announcement of a loan package, represent a vital shot in the arm for a sector facing enormous uncertainty.”
All businesses will not have to pay business rates this year, equating to a saving of around £32 billion for companies concerned about going bust or laying off staff.
The retail industry on its own would save around £7.9 billion.
The pledge to offer £330 billion of commercial loan guarantees was also welcomed, with the range of packages going beyond most other countries in terms of per-capita spending commitments.
Some larger firms said the moves did not go far enough to help them, but small businesses were pleased with the support.
This includes a £25,000 grant for businesses entitled to the Retail Discount, with £10,000 for those qualifying for small business rates relief.
Federation of Small Businesses chairman Mike Cherry said: “This unprecedented package of loan guarantees, business rates breaks and cash grants marks a hugely welcome step forward.
“The key now is to deliver these measures within the coming days with no hold-ups at banks, local authorities or central government.
“Clearly small employers will need a huge amount of support to keep staff on their books at this hugely difficult time, so it was good to hear the Chancellor pledging to develop an Employment Support Package to help make that possible.
“We will be working together with the government to ensure the employment package provides for the self-employed.”
Jace Tyrrell, chief executive of New West End Company which represents 600 retailers and businesses across London’s West End, said the government has gone “further and faster” than what the organisation had sought.
“In promising to do whatever it takes to address both immediate fixed costs and provide longer term guarantees, the Chancellor has done much to alleviate the anxiety of businesses in retail, leisure and hospitality and the millions employed in these sectors,” Tyrrell said.
“This will take the immediate cash-flow and liquidity pressures off many West End businesses, providing them with time and options to take action to protect their employees and balance sheets.
“While many challenges still lie ahead, today’s announcement has prevented the immediate loss of tens of thousands of jobs.”
While shopworkers’ trade union Usdaw welcomed the extra support, it called for more help for workers who still face lay-offs and reduced income if forced to take time off work.
It urged the government to improve statutory sick pay so it reflected average pay, increasing it from its current £94.25 per week to £95.85 per week at the start of April, as well as pay statutory sick pay to low-paid workers – since workers earning below the lower earnings limit of £118 per week currently do not qualify.
It also called for additional paid family leave to help working parents cope with school closures, based on average pay and ensure businesses are able to continue paying workers their average pay during the crisis.
“After the government… announced extensive social isolation measures, they left many businesses in real trouble,” Usdaw general secretary Paddy Lillis said.
“[The] business rates holiday is therefore welcome, but may have already come too late for some workers who have been laid-off and we look forward to hearing what more they are going to do.
“We also welcome the three-month mortgage holiday, but there needs to be similar assistance for renters, who are more likely to be in insecure work and at particular risk from the economic effects of coronavirus.
“The Chancellor’s commitment to work with trade unions to look at employment support is helpful and we look forward to an early invitation to high-level talks.
“Usdaw members have significant issues that need resolving, particularly around sick pay, worker protection and job security.
“Retail workers are playing an essential role in helping communities to get through the coronavirus emergency; they deserve our support, respect and appreciation for everything they are doing at this difficult time.”
Meanwhile, economists noted caution that more action was required from the government and Bank of England.
Alan Monks, an economist at JP Morgan, said the “initiatives aim to help businesses meet their fixed costs and reduce the need to shed jobs”.
He added: “Although the package is set to grow in the coming days as further measures are added, it is still likely to look small compared to the economic shock under way.”
James Smith, an economist at ING Economics, explained that companies may also be wary of taking on more debt.
He added: “There’s little doubt this is a sizable package, and the Chancellor will be hoping the large sums contained within his announcement will help convince firms to hold off on any restructuring decisions they may be considering.
“However the real challenge for the government will be to channel this money to firms rapidly, particularly in light of the number of businesses already making announcements about job losses.”
Paul Martin, UK head of retail at KPMG, said: “News of a business rates holiday for those in this sector will be most welcome, being a sizeable operational expense for many retailers.
“Meanwhile, the offer of loans is likely to help cover other sizable costs impacting cash flow, including wages and rent.
“However, the loans will still need to be repaid further down the track, although immediate survival is naturally going to trump increased costs thereafter.
“With cash so critical in the industry, the measures announced are likely provide some necessary relief for the sector as it get to grips with the impact of Covid-19.
“Of course time will clearly be of the essence, and we’re not even in near the peak of the issue yet.
“In the weeks ahead we will need to see much more in the way of business and government collaboration as well consumer consideration.
“It’s only logical that underused non-food supply chains be repurposed to cater for the surges in demand in certain other categories, including grocery.
“Likewise, consumers are going to have to adapt their behaviour to accommodate the pressing calls to be more considerate when shopping.”
with PA Wires