‘Act now and act decisively, chancellor – our high streets depend on it’

His words, for many companies, are far closer to the bone than the chancellor would have intended.

For dozens of businesses, the “end” will not be the conclusion of their Covid-19 nightmare and the start of a new beginning. Instead, it will be the end of their very existence, the end of the jobs and livelihoods they support, and the end of the role they play on our high streets.

Sunak has the power to turn the tide and help all businesses secure a future beyond the pandemic. The financial measures he announced today are, of course, welcome but simply will not be enough to achieve that.

“It is another short-term solution from the Treasury rather than a long-term plan – perhaps unsurprising from a government that has lurched from lockdown to lockdown, learning few lessons”

As if a reminder of the plight facing many non-essential retailers was needed, Paperchase provided it. Barely an hour after Sunak’s announcement from Downing Street, it emerged that the stationery specialist had filed a notice of intention to appoint administrators from PwC.

Paperchase rakes in almost half of its revenues during the golden quarter but all of its 127 shops were closed for the majority of that period, decimating its finances and leaving it on the brink of collapse.

It is the first retail casualty of 2021 but will not be the last unless Sunak acts faster, with greater financial clout and provides a more detailed vision of the government’s plan to help businesses navigate the coming year.

A government without a plan

The £4.6bn of additional support he revealed today for retail, hospitality and leisure businesses forced to close during lockdown will hand physical operators grants worth up to £9,000 per premises, depending on each property’s rateable value. Local councils will receive £594m to support companies in their area that are not eligible for the new payments to help them through to spring.

But it is once again another short-term solution from the Treasury rather than a long-term plan – perhaps unsurprising from a government that has lurched from lockdown to lockdown, learning few lessons between each wave of draconian measures.

Persistent calls for business rates relief to be extended throughout the whole of 2021 to fend off what the CBI described as an April “cliff edge” have so far fallen on deaf ears. There is still no update on the progress of the “fundamental review” of that tax, promised by the government last March – two weeks before the first lockdown was implemented.

“Sunak’s latest measures have done nothing to dispel retailers’ fears or paint a clearer picture of the future”

Although the furlough scheme has been extended into April, many business leaders want this vital funding to be made available until the summer. There is a growing clamour among business groups for the temporary cut in VAT to be prolonged beyond this month. 

But perhaps more importantly, retailers and other high street operators need a sense of clarity. They need sight of the government’s long-term roadmap for business support so that they can plan accordingly, shift their strategies and cost bases if required and, ultimately, give themselves the best possible chance of survival.

Several retailers told me in December that their biggest challenge heading into Christmas and 2021 was “uncertainty”. Sunak’s latest measures have done nothing to dispel those fears or paint a clearer picture of the future. A few thousand quid per store represents little more than a sticking plaster for many businesses haemorrhaging cash.

A living nightmare

The BRC estimates non-essential retailers will suffer £2bn a week in lost sales during this third lockdown. Research from the Office for National Statistics has warned that half of all hospitality businesses in the UK – 37,500 pubs and 27,000 restaurants are now closed across the country – do not have sufficient cash in the bank to make it through February. Just one in five businesses in that sector were confident they could survive beyond the end of March without greater government support.

An executive from one retailer, which operates stores and a transactional website, described the situation as “a living, breathing nightmare”.

“I don’t know how long we can go on like this and it’s heartbreaking,” they said. “Our store staff have been on furlough since tier-four restrictions came in and the reality is they now might not have jobs to come back to.

“All we want is the government to lay out a proper roadmap so that we can start to see a way out of this and plan accordingly. It’s really not much to ask but it could be the difference between life and death for so many businesses like ours.”

Sunak says his budget in early March will offer the government a chance to “take stock of our wider support and set out the next stage in our economic response”.

Some businesses cannot afford to wait until then. Act now and act decisively, chancellor. The vibrancy and vitality of our high streets depend on it.