Chloe Shakesby

"Businesses must not be allowed to fail now": Industry leaders react to national lockdown

Business leaders from across the UK have called for more support from the government as a new state of lockdown is implemented.

Following the Prime Minister’s announcement yesterday (4 January) that the country would be reentering lockdown for the foreseeable future, prominent figures from businesses across the UK have commented on the effect the news will have.

While many support the decision to go into lockdown, some have questioned the lack of business support outlined by the government so far.

Since the publication of these comments, further support has been announced for businesses in lockdown.

Susannah Streeter, Hargreaves Lansdown

“Many companies had glimpsed light at the end of the tunnel but now that tunnel appears much longer.

“Given the new strain of the coronavirus is much more contagious, containing its spread is going to prove even harder so now exit from lockdown will rely on the pace of vaccine roll outs.

“Not only will Q1 prove exceptionally tough but the whole first half of 2021 is likely to remain a challenge, with recovery pushed back to later in the year.

“Businesses are now waiting to see what extra support the Chancellor will rustle up later to help them survive the bleak months ahead.’’

Dan Jarvis, Mayor of the Sheffield City Region

“We’ve seen an alarming increase in cases in recent weeks, initially concentrated in London and the South East, but now rates of infection and hospitalisation are rising extremely quickly in almost every region of the UK.

“It’s devastating for families and businesses to start the New Year with tighter restrictions, but this is the only way we will save lives and prevent our NHS and hospitals from being overwhelmed in the toughest winter we have faced.

“The Prime Minister took too long to take this decision and now needs to urgently set out how the government plans to contain the new variant of the virus until a vaccine can be fully rolled out.

“This plan must come alongside a comprehensive package of financial support for workers and businesses, assistance for schools and students to ensure no young person is further disadvantaged and a long-term recovery plan to level up the economy.

“I understand just how weary and frustrated many people will be, but the lockdown in March reduced the spread of the virus, and if we all follow the rules, this one will as well.

“For the sake of our families, our communities, and our businesses, everyone needs to play their part.”

Adam Marshall , BCC

“Businesses will understand why the Prime Minister has felt compelled to act on the spiralling threat to public health, but they will be baffled and disappointed by the fact that he did not announce additional support for affected businesses alongside these new restrictions.

“The lockdowns announced in England and Scotland are a body blow to our business communities, hard on the heels of lost trade during the festive season and uncertainty linked to the end of the Brexit transition period.

“Tens of thousands of firms are already in a precarious position, and now face a period of further hardship and difficulty.

“Billions have already been spent helping good firms to survive this unprecedented crisis and to save jobs.

“These businesses must not be allowed to fail now, when the vaccine rollout provides light at the end of this long tunnel.

“The financial support for businesses needs to be stepped up in line with the devastating restrictions being placed on them.

“Otherwise, many of these firms may simply not be there to power our recovery when we emerge once again.

“Enhanced support for businesses, a turbo-charged vaccine rollout, and delivery of existing promises on mass testing must be delivered to enable the UK to restart, rebuild and renew.”

Justin Small, Future Strategy Club

“Companies need to be careful to accommodate their employees’ needs and concerns otherwise, talented individuals will be drawn towards going it alone or jumping ship, causing repercussions for businesses that may be on the edge of surviving and going under.

“It wouldn’t be surprising if 2021 becomes the year of the mass exodus from the 9-5 and towards self-employment.”

Ben Dyer, Powered Now

“The economic recovery we have seen over the past months is indeed welcome, but of course with most of Britain being placed in national lockdown, this month and the remainder of the winter season are of course going to present yet more challenges.

“That’s why it would be prudent to look towards sectors that remain open, such as construction and the trades, to provide the kind of stability we need at the moment.

“The restrictions have had a negligible impact on the construction sector so far, and overall activity around construction has to be welcomed.

“Given the bonanza that housebuilders are currently experiencing from the Stamp Duty reduction, it’s no surprise that they are the best performing sector of the construction industry.

“Whether this boom for the housing industry will be followed by a bust is unknown. At the moment, most firms are just grateful for the good business they are getting right now given how much other sectors are suffering.

“It is disappointing that the supply of building materials remains a constraint and it could be argued that suppliers over-reacted to the first lockdown, creating this situation.

“The reduction in the rate of output could be the first signs of a drop in demand from lockdown related macroeconomic damage. Let’s hope that isn’t the case.

“However, it looks like the new restrictions will not impact the specific sub-sector of home improvement either, although the jury is still out.

“It may be that homeowners become more anxious over time, particularly as the virus continues to spread rapidly. The biggest concern overall is about the supply of materials. Fortunately, at the moment the indicators are that the shortage is easing.”

Russ Mould, AJ Bell

“The stock market reaction to a new lockdown in England could have been a lot worse, but it is fair to say there were plenty of signs in recent days that full lockdown was coming, such as similar restrictions being announced in Scotland yesterday.

“Quite a few UK domestic businesses saw their shares sell off yesterday afternoon amid speculation about what Boris Johnson might announce in his evening speech, so an element of the bad news was already priced in before markets opened today.

“Nonetheless, given the severity of the lockdown restrictions announced by the Prime Minister, one might have expected a repeat of last year’s trends with lockdown losers slumping on the stock market and beneficiaries rallying. That’s not entirely the case this time round.

“There was weakness in the likes of Greggs which will lose out from the likely sharp drop in footfall and slump in commuter traffic.

“Trainline’s shares slipped as non-essential travel is discouraged; and Barclays saw its share price dip on market fears of rising bad debts and interest rates staying lower for longer which is bad for the banking sector.

“However, the scale of these share price declines is very minor.

“What’s surprising is how shares have risen in both tour operator TUI and pubs group Fuller Smith & Turner given their businesses will once again be severely disrupted by the Prime Minister’s latest actions.

“Missing in the Prime Minister’s speech last night was new support measures for businesses.”

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