(Sharecast News) – The Confederation of British Industry has called on the chancellor to extend the furlough scheme, warning that companies had been hit hard by the latest round of lockdown restrictions.
In a letter to Rishi Sunak, the business group said the latest lockdown had squeezed both cash flow and demand, hitting business resilience.
The furlough scheme is due to finish at the end of April, and the government is scheduled to provide an update on the future of Covid-19 support measures in March’s budget.
But Tony Danker, CBI director-general, called for more immediate action. “Many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks,” he said. “If the government plans to continue its support then I urge them to take action before the budget, which is still more than six weeks away.”
The CBI is calling for the job retention scheme to be extended to the end of June, with a commitment to provide targeted support after it finishes; for repayment periods for existing VAT deferrals to be lengthened until June “at the earliest”; and for the business rates holiday to continue for “at least” another three months for firms who have had to close during the latest restrictions.
Danker said: “The budget comes at a crucial time for the UK. The government’s support from the very start has protected many jobs and livelihoods.
“But almost a year of disrupted demand and extensive restrictions to company operations is taking its toll. Staff morale has taken a hit and business resilience has hit a sobering new low.
“The government must once again stand shoulder-to-shoulder with businesses to underwrite support for the duration, helping viable enterprises to last the course.”
The CBI also called on the government to use the budget to look beyond the immediate crisis to the long-term structure of the UK economy.
Rain Newton-Smith, CBI chief economist, said: “There is clear light at the end of the tunnel and reasons to be optimistic.
“This budget is an opportunity to focus on balanced economic recovery, not driven solely by consumption and government spending, stimulating much-needed business investment and tackling the systemic challenges that have held the UK back.”
Sunak is due to present his budget to the Parliament on 3 March.
