More support still needed for West Midlands businesses

Mr Sunak has promised Government intervention ‘on a scale unimaginable only a few weeks ago’, in order to support the economy through the Covid-19 outbreak including Government backed and guaranteed loans worth £330 billion to support companies with access to cash to pay rent, salaries, suppliers and manage stock and an extension to the Business Interruption Loan Scheme - increasing the loan amount from £1.2million to £5m with no interest due for the first six months.

Corin Crane, the chamber's chief executive, said: "Whilst these interventions will provide additional support to those announced in last week’s Budget; realistically we are only at the start of this crisis and much more might be required over the forthcoming weeks and months.

“The chamber is a powerful network and will continue to work hard on behalf of our members to both provide guidance and advocate for their needs. I want businesses to know that they are not alone, and we are here to help.”

He said the chamber was working tirelessly to offer support, advice and guidance to its members and has implemented a string of business support packages, including a telephone helpline and planned webinars for members and non-members.

Adam Cunningham, chairman of the Manufacturing Assembly Network and chief executive of Muller Holdings, Cleobury Mortimer, said: "Broadly speaking, we think it’s a positive start, but more targeted manufacturing support needs to be included in the ongoing package.

"Apart from the obvious business rates and rent issues, most of us have invested significantly in new technology and equipment to make sure we’re globally competitive. This will need to be offset in some way, so that we can continue to manufacture during the testing months ahead.

"Preservation of cash is key in uncertain times. We would encourage the Chancellor to look at payment holidays, support with debtor controls, maybe delayed corporation tax and NI payments – all of these could make the crucial difference.

"There are also issues for businesses with final salary pension schemes that are paying large amounts of cash out each month to shore up old schemes. It’s manageable while we’re trading normally, but could potentially be the final nail in the coffin for a lot of good companies.

"Finally, support for workers with zero-hour contracts. These predominantly operate in logistics and distribution, a sector that is critically interwoven into the world of engineering and manufacturing."

Leading West Midlands businessman and investor Paul Bassi has highlighted some immediate steps the Government could take to support leisure and hospitality businesses in the West Midlands in the light of the coronavirus outbreak.

The former Birmingham Chamber president said: “The Government has responded quickly and the existing initiatives offered have been very helpful, especially for affected sectors such as hospitality and leisure. However, I think the Chancellor, who has said he will do ‘whatever it takes’, will have to go further and he should not hesitate.”

Among the practical measures he is advocating are covenant and amortisation suspension for 12 months, plus the suspension and deferral of VAT, National Insurance and PAYE payments for six months.

“This would hit the Government’s cash flow – but help cash flow in businesses, particularly SMEs, and notably the major sectors in the West Midlands that need help, such as the NEC/ICC/NIA, and the tourism and hotel sector that is so vital to the local economy, " said Mr Bassi, chief executive officer of Real Estate Investors and chairman of commercial property agents Bond Wolfe and Bond Wolfe Auctions.

Neil Lloyd, incoming managing director at law firm FBC Manby Bowdler which has offices in Wolverhampton and Shropshie, said: "We are talking to businesses about the additional measures announced by the Chancellor and seeing where we can provide support. This includes manufacturers who are rallying to produce the ventilators the UK is going to need and leisure and hospitality businesses which are facing probably the toughest test many of them have ever faced.

"It is good to see that the new loan facility via the British Business Bank has been extended to £5m which will help some of our larger corporate clients. However we are concerned that the rates relief and the new grants for smaller businesses, restaurants, bars and hotels will not be coming down the line quick enough.

"If the Government is announcing this cash is available, they need to make it available now – not at the start of next month. For businesses with wages to pay at the end of the month, this could be too late."

Dame Carolyn Fairbairn, Director General of the Confederation of British Industry, said: "The Chancellor has taken substantial steps in unprecedented times. Today’s massive increase in Government-backed loans, higher cash grants and widened business rates relief for some sectors will help firms protect jobs and businesses. All now need to be delivered on the ground with speed and simplicity.

“The Chancellor is right to commit to doing whatever it takes.

“The new financial package provides valuable support to areas facing immediate stress, including hospitality and retail. As next steps, it will be vital to stay ahead of the economic impact, not waiting until firms are on the brink. Wider whole-economy measures like regulatory and tax relief in areas including VAT and National insurance will support a broader range of firms in real need.

“Urgent decisions are also needed on wages. An immediate mechanism is needed to top up wages for firms with no choice but to reduce hours for lower paid staff, so they can keep them employed and get through to the other side.

“It is clear this situation will not stand still, so nor can the economic support. The pace of change is too fast to play catch up.”