The CBI is continuing to engage with political stakeholders providing the latest business insight on how businesses are accessing finance, plans for the restart and what firms are doing to respond to the Personal Protective Equipment (PPE) challenge.
Improving the Job Retention Scheme
Over recent weeks the CBI has been engaging extensively with HM Treasury, HMRC BEIS and other government departments to improve the design and implication of the Job Retention Scheme (JRS) following its unveiling by the Chancellor, Rishi Sunak, on 20 March.
Front and centre of these efforts has been the need to extend the JRS beyond the original 31 May deadline.
Without this extension, some firms would have been left with little option but to trigger redundancy consultations with staff from 18 April. Thankfully, on Friday 17 April, the Chancellor, Rishi Sunak, heeded these calls, announcing the scheme’s extension to at least 30 June.
From alerting officials to this issue in early April, to extensive engage at the highest level, the CBI played crucial role in the government’s decision to extend the JRS, which allows firms to return to focusing on protecting jobs and their businesses.
The extension came at an important time for firms as they turn their attention to applying for the JRS which went live last Monday (20 April).
Alongside securing an extension to the duration of the JRS, the CBI’s also been working closely with HMRC to improve the practical guidance provided to firms on how the scheme will work in practice, how salary is calculated and how employers should treat holiday pay accrued while a staff member is furloughed.
Addressing businesses’ cashflow concerns
Alongside the JRS, firms have also sought clarity on the need for effective cashflow support via the Coronavirus Business Interruption Loan Scheme (CBILS).
In the initial weeks that followed the launch of the scheme many smaller companies told the CBI that they were struggling to access the support due to the burden of the affordability and viability criteria. For others, high fixed costs and tight margins mean existing loans and tax deferrals are not enough to survive, despite help with staff costs.
The CBI has acted on these concerns, using its engagement with government officials – including Business Secretary, Alok Sharma – to highlight the teething issues facing firms and stressed the vital importance of getting help to where it is needed most.
To help overcome these issues and accelerate delivery of vital financial support, last week the CBI published three recommendations the government should take to get support to distressed firms as quickly as possible through the CBILS scheme.
These proposals included:
- Simplifying the approval process for loans under £25,000
- Increasing the government guarantee from 80% to 100% for CBILs loans up to £500k
- Streamlining the documentation requirements to speed up eligibility and viability assessments, with standard templates as in Germany and Switzerland
Alongside these improvements to CBILS, in its intervention the CBI also called on policymakers to provide all firms in England, Scotland and Wales with a three-month business rates suspension (as in Northern Ireland) and consider grant schemes to help smaller firms unable to access existing support.
Following this intervention, Chancellor Rishi Sunak, announced on Monday (27 April) that the government will offer ‘bounce-back’ loans of between £2,000 and £50,000 for small businesses backed by 100% government guarantee. The loans will be interest free for the first 12 months, and businesses will be able to apply online through a short and simple form. CBI Director-General, Carolyn Fairbairn, described the new government loan scheme as ‘transformational’ adding that it would give small firms ‘a simple route to fast finance to stay afloat.’
Building relations with the new Labour frontbench
As well as engaging with the Chancellor on the economic response to Covid-19, the CBI has also been developing a good relationship with the Shadow Chancellor, Anneliese Dodds.
Last week, the Shadow Chancellor joined the CBI’s daily webinar to discuss the role of business in planning for a restart of the economy.
Carolyn Fairbairn highlighted the importance of building ‘consensus’ behind any restart approach and highlighted the CBI’s work with a range of stakeholder including the TUC, whilst Ms Dodds urged continued collaboration between business and unions and the importance of learning the lessons on what working practices have worked well, but also what hasn’t during the lockdown.
Business stepping up to address to the PPE Challenge
Elsewhere, the CBI has been engaging with the new Chief Operating Officer for the Civil Service and Permanent Secretary at the Cabinet Office, Alex Chisolm and Lord Paul Deighton, who has been appointed to lead the national effort to produce essential PPE for frontline health and social care staff.
With many firms responding to the increase in demand and global pressures on PPE the CBI has offered to facilitate the government’s engagement with businesses on this critical issue and to improve the information available to businesses.
PPE is also an issue that the CBI has been engaging with the new Shadow Business Secretary, Ed Miliband. During calls with Mr Miliband, Carolyn has highlighted the business response to government calls for assistance and has highlighted the CBI’s working groups focusing on how businesses can help solve major challenges impacting society.