British Firms Call for Immediate $10.3 Billion in Covid Aid

via Reuters

By William Schomberg

LONDON (Reuters) – British firms called on Tuesday for another 7.6 billion pounds ($10.3 billion) of emergency government help, saying they cannot wait until finance minister Rishi Sunak’s March budget to learn if they will get more pandemic support.

With Britain back under lockdown and companies adjusting to life after Brexit, firms are taking big decisions about jobs and investment and need to know if their financial lifelines will be extended, the Confederation of British Industry said.

“We just have to finish the job. Now would be a very odd time to end that support,” CBI Director-General Tony Danker said in a statement.

Sunak has extended his support measures several times already and has said his response to the pandemic will cost 280 billion pounds during the current financial year, saddling Britain with a peacetime record budget deficit.

But he is facing calls on many fronts to spend yet more including from lawmakers, some from his Conservative Party, who want an emergency welfare benefit increase to be prolonged.

The CBI said Sunak should extend until June his broad job retention scheme, which is scheduled to expire in April, and then follow it up with targeted support for jobs in sectors facing a slow recovery such as aviation.

He should give firms more time to pay back value-added tax which was deferred last year, grant a similar deferral for early 2021 and extend a business rates tax exemption for companies forced to close by the lockdown as well as their suppliers.

“The rule of thumb must be that business support remains in parallel to restrictions and that those measures do not come to a sudden stop,” Danker said.

The CBI said its longer-term priority was an overhaul of the business rates system that it said was outdated and discouraging investment in low-carbon energy.

Danker said it was too soon to start raising Britain’s corporation tax rate, one of the lowest among rich economies after a Times report that Sunak was drawing up plans to increase it to start fixing the public finances.

“It would be wrong to raise business taxes when we don’t have a recovery,” Danker said.

($1 = 0.7380 pounds)

(Writing by William Schomberg; Editing by Alexander Smith)