Business lobby urges more help for virus-hit UK companies

Confederation of British Industry raises concerns that tens of thousands of small businesses could collapse

Britain's Finance Minister Rishi Sunak will deliver his next budget on March 3. Reuters

Britain's main business lobby on Tuesday urged the government to extend its furlough jobs support scheme and tax holidays to help companies worst hit by the coronavirus.

With fears that tens of thousands of small businesses could collapse, the Confederation of British Industry called on Chancellor of the Exchequer Rishi Sunak to act urgently.

It said companies could not afford to wait until his annual budget on March 3 for new measures.

"Many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks," CBI director general Tony Danker said.

"The government has done so much to support UK business through this crisis. We don't want to let slip all the hard work from 2020 with hope on the horizon" from Britain's vaccine programme.

The CBI has urged Mr Sunak to again extend the furlough scheme that is funding most of the wages for millions of private-sector workers.

The multibillion-pound support plan, launched last March, is set to expire at the end of April but the CBI wants it to go on until the end of June.

The lobby group is also seeking deferred payments of VAT and an extension to a pause in business rates levied on commercial property.

Much of the UK re-entered lockdown this month, with restrictions similar to the country's initial Covid-19 curbs imposed mostly during the second quarter of 2020.

"The government's support from the very start of this crisis has protected many jobs and livelihoods, and progress on the vaccine rollout brings real cause for optimism," Mr Danker said.

"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 UK government has spent about £300 billion ($407.96bn) in emergency measures to stem chronic economic fallout, sending Treasury debt soaring.

And recent data showed that Britain's economy slumped 2.6 per cent in November from October, stoking fears that the current lockdown could spark a double-dip recession.

Mr Danker said he hoped to see improved business regulatory rules after Britain finally departed the EU's single market at the start of the year.

"Better regulation, smarter regulation, more modern regulation is definitely of interest," he said.