Half a million businesses in danger of collapse without further support
More than half a million businesses are at risk of collapse by spring unless the government extends support to Covid companies.
So says the Institute for Public Policy Research (IPPR) think tank in its latest report.
The 600,000 companies that are at risk of collapse without further support together employ about 9 million people “whose jobs could be lost,” said the think tank on the left of center.
Small businesses (which collectively account for a large part of UK employment) are most at risk of bankruptcy. About 40 percent of companies with fewer than 50 employees have less than three months of cash remaining.
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Half of all hotel, food, and other specialist service companies have less than three months of cash left, as do 40 percent of arts and entertainment companies.
Overall, the number of companies with “dangerously low” cash buffers rose sharply in the four months to the end of January as national lockdowns restrict trade, according to the IPPR.
The Chancellor should use the March 3 budget to extend the vacation program, which ends in late April, to provide more grants and to take holdings in companies in exchange for cash injections, creating a so-called “Citizens’ Wealth Fund” .
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“Millions of jobs and people’s livelihoods depend on the Chancellor preventing companies from going broke while the pandemic is under control and on having enough money to not only hobble through this crisis but get out of it when the ban ends. ” George Dibb of IPPR told the Telegraph.
“By expanding and improving current support programs and by injecting new money into businesses in return for long-term stake in their future, the government can ensure that our best businesses survive and come back to life as our economy recovers from this long hibernation . “
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