Wednesday 20 May 2020 12:45 am

Coronavirus: Over half of UK firms cannot reopen fully, survey shows

Save our SMEs

Almost 50 per cent of UK firms are only ready to partially reopen their businesses as the government lifts the coronavirus lockdown, a survey has shown, with one in 10 saying they cannot restart at all due to Covid guidelines.

The survey, from the British Chambers of Commerce (BCC), also showed that 85 per cent of UK firms have received money from the job retention scheme, laying bare the extent to which firms are relying on the government for their survival.

Read more: UK lockdown: Pedestrian activity soars 25 per cent as Londoners get back to work

It comes as politicians and think tanks battle it out over how best to achieve a speedy economic recovery once coronavirus is under control. Free-market think tank the Adam Smith Institute today warned that government support measures must be “phased out” as soon as possible.

The BCC survey outlined how UK firms will struggle to reopen fully and follow government coronavirus safety guidelines.

Just 37 per cent of firms said they can fully restart operations by implementing government guidance, which encourages social distancing and extra cleaning among numerous other measures.

By contrast, 45 per cent of firms said they will only partially be able to reopen, with social distancing guidelines set to cause problems. Meanwhile, 10 per cent of firms said they are not able to follow guidelines and restart at all.

Some companies in construction and manufacturing restarted work last week, after Prime Minister Boris Johnson eased some of the coronavirus restrictions and laid out a “roadmap” for further easing of the lockdown.

Schools and non-essential shops may be allowed to reopen from 1 June, if the government deems it is safe enough. Hospitality businesses such as restaurants and pubs will not open until at least 1 July.

The government has produced guidelines for many different types of workplace on how to reopen safely. 

Listen to our daily City View podcast as we chart the economic fallout and business impact of the coronavirus pandemic.

But the BCC survey highlights firms’ misgivings about reopening. Many say they will struggle to implement safety guidelines or simply will not be viable if capacity is reduced due to social distancing.

BCC director general Adam Marshall said: “Some sectors still require greater clarity from the government on when and how they will be allowed to do so. This is particularly the case for hospitality and leisure companies.”

The survey also showed how reliant UK companies are on the government amid the Covid-19 pandemic. The BCC said 85 per cent of UK firms have now applied to and received money from the job retention scheme. It pays 80 per cent of “furloughed” workers’ wages up to £2,500, and was recently extended until October.

Politicians and think tanks are increasingly expressing their ideas about how to ensure a swift economic recovery. The free-market Adam Smith Institute (ASI) last night said the “extraordinary” economic measures “must not be allowed to become permanent”.

In a report, the ASI said the job retention scheme should be adapted so that people are allowed to return to work. It said the government could continue to top up the wages of people who are returning to work for firms that have suffered a big drop in revenue.

Read more: Coronavirus loans hit £22bn, but just 50 per cent of CBILS lending approved

In the longer run, the ASI said the adapted job retention scheme that tops up salaries of people working reduced hours could be rolled into the Universal Credit benefits system.

The report also said “microbusinesses” with nine or fewer employees should be exempt from producing Covid-19 risk assessments before they reopen.

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