The UK Government is working on plans to begin to ease the lockdown caused by the deadly virus but a new survey found that if there is a second wave of the pandemic, more than 1.1 million firms will close. The Opinium-Cebr Business Distress Tracker, which surveys 500 businesses across the country, completed the research.
On Sunday, Prime Minister Boris Johnson addressed the nation and revealed plans to start to ease lockdown restrictions and said those who cannot work from home should return to their place of employment.
He said: “This is not the time simply to end the lockdown.
“Instead we are taking the first careful steps to modify our measures.”
However, according to the new study, businesses would need around six months to return to the same levels of production seen before the lockdown happened back in March.
Businesses in Camden High Street closed following Covid-19 lockdown
Boris Johnson announces steps to ease lockdown
Around one in six said they would require at least 12 months to recover.
Pablo Shah, a senior economist at Cebr, told the Telegraph: “The scale and severity of the continued disruption to activity means that the UK is suffering a period of deep economic contraction.
“Even when restrictions are completely lifted, an immediate bounce-back is not on the cards, and the majority of businesses are set to remain at much lower than normal levels of production throughout the remainder of 2020.”
During the first 30 days of lockdown, businesses reported that profits dropped an average of 29pc.
Chancellor Rishi Sunak will reduce furlough scheme to 60 percent
James Endersby, the chief executive of Opinium, said: “The damage inflicted on UK businesses by the pandemic and lockdown is colossal, and the figures make for very sombre reading.
“The business impact is felt in almost every region, sector, business size and at almost every level of employment. It’s unavoidable.
As the coronavirus continues to ravage the country, millions of businesses signed up for the government’s furlough scheme so staff could be paid 80 percent of their salary.
The scheme is reportedly expected to extend until September – seven months after lockdown went into place – but will be reduced to 60 percent.
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Chancellor Rishi Sunak is expected to announce that the Treasury will “top up” wages of furloughed staff who are able to return to work on a part time basis.
The job retention scheme was originally intended to run until May, but as the pandemic has progressed it has been extended until the end of June.
The Government has faced a growing headache of how to taper back its furloughing regime, which is costing an estimated £16 billion a month.
Mr Sunak has previously insisted that “there will be no cliff edge to the furlough scheme” as the Treasury considers ways to wind the programme down.
London’s famous Oxford Street empty due to Covid-19
A Treasury spokesman said: “The coronavirus job retention scheme is an absolutely crucial element of our financial support in protecting jobs and businesses through this crisis and has already supported millions of workers across the UK.
“Future decisions around the scheme will take into account the wider context of any lockdown extension, as well as the public health response, so that people and businesses can get back to work when it is safe to do so.”
Businesses figures have raised their concerns about prolonging the scheme for too long.
Sir Lloyd Dorfman, the founder of bureau de change firm Travelex, said: “This furloughing is unsustainable for an extended period of time.
Businesses face collapse due to Covid-19
“I think they’re going to start to unwind it.
“And I think they’ve got too, they’ve got to get economic activity back happening again.”
Others, such as The Institute of Directors, have welcomed plans to make furlough more flexible.
Edwin Morgan, director of policy, said: “Enabling people to return to work gradually can help businesses get back on their feet.
“With demand still flagging across the economy, and social distancing proving a challenge for many firms, the Government needs to be agile with its support.”
Published at Mon, 11 May 2020 20:23:00 +0000