ALMOST half British companies expect to furlough 50 per cent or more of their workforce, a survey by the British Chambers of Commerce (BCC) showed on Thursday (2), underlining demand for government support as the world's fifth-largest economy grinds to a halt.
Britain promised hundreds of billions of pounds in support for businesses during an enforced lockdown of the population to help prevent the spread of coronavirus.
One part of that support package - a promise to pay 80 per cent of employees wages up to 2,500 pounds per month if they are temporarily laid off - is set to be heavily used according to a survey of over 600 businesses conducted between March 25 and 27.
The survey showed 44 per cent expect to furlough at least half their workers within a week, and 32 per cent were expect to furlough between three-quarters and all their workforce.
In a bid to prevent firms permanently laying off workers and slowing the subsequent economic recovery, Chancellor Rishi Sunak declared that funding for the scheme was unlimited.
"Since the start of the coronavirus outbreak, I’ve made it clear that hard-working employers and employees should not have to suffer hardship unnecessarily," he said.
BCC Director General Adam Marshall said that while the scale of the support was welcome, it was urgent that the promised funds find their way to struggling companies quickly.
"The majority of firms cannot wait weeks or months for help to arrive," he said in a statement.
The BCC data showed just under a fifth of firms reported having less than a month's cash in reserve, and 44 per cent said they had 1 to 3 months' cash set aside.
Government instructions for people to stay at home and only shop for essential items lasts until April 13, but the lockdown is widely expected to be extended as Britain tries to reduce transmission of the virus and prevent its health service becoming overwhelmed.
The BCC survey also showed nearly two-thirds of firms reported a significant fall in revenues from within Britain, as many non-essential sectors have been forced to shut down.
Responding to criticism that many of the announced support measures were yet to kick in, a spokesman for the finance ministry said on Wednesday (1) that hundreds of loans made under a separate emergency scheme had already been made.
(Reuters)
