Government urged to act on three key measures to support Greater Manchester businesses

In anticipation of the introduction of the tiered framework for local social distancing, the Business Organisations representing more than 30,000 businesses (and covering two-thirds of all employees) across Greater Manchester have come together to set out key requirements for this new approach from Government.

Greater Manchester is home to a thriving private sector and a well-established business support base that works tirelessly on behalf of Greater Manchester’s business eco-system.  The impact of Covid-19 on Greater Manchester businesses is enormous in the short-term, and with potentially profound long-term implications. We need to set a platform for the immediate future that enables our businesses to emerge from a position of strength, driving forward both the city-region and our country’s economic revival.

Covid has disproportionately impacted the economy of our big Cities, which will need to be supported to repurpose and come back stronger. As stated in the Greater Manchester Independent Prosperity Review: “now is not the time to lose confidence in the driving role that major city-regions have always played in improving collective prosperity and in leading national recovery from major traumas.”

We are calling on the Government to act on three key areas to support businesses to operate safely and enable them to do what they do best and keep the economy moving.  In brief, these are centred on the:

1. Proposed new tiered frame for local lockdowns – for which we are requesting that there is a:

• Fully transparent and evidenced based set of criteria for movement between tiers;
• Consistent application of these criteria to all geographies;
• Clear exit/de-escalation routeway, similarly transparent, consistent and evidence based;
• Compensatory support mechanism for businesses and employees impacted by additional local restrictions.

And that the tiered approach is on a foundation of a fully functioning test, trace and isolate system.

2. Review the work from home guidance for Covid-19 secure office workplaces, recognising the growing impact of this on employee welfare, business innovation, as well as the compounding multiplier impact on dependent sectors such as hospitality.
3. Improve the support package for sectors critically affected by Government restrictions particularly, but not limited to, aviation and hospitality, for which we also request that the Government pause the abolition of Tax Free Shopping for international visitors and grant an extension to the current VAT reduction for hospitality businesses for the remainder of 2021.
4. Tiered Framework for Local Restrictions

Tiered Framework

Should the Government introduce the proposed tiered approach to local restrictions it will provide businesses (people and places) with greater clarity and certainty in which to manage.   To be successful such an approach will need to have a fully transparent and evidenced based set of criteria for tier designation that is consistently applied across the country, enabling businesses to understand and plan ahead; along with a clear exit/de-escalation routeway, which is similarly transparent, consistent and evidence based.

Businesses will also need to be better supported through these tiers and where more general restrictions apply.  The recent set of local restrictions introduced by Government with little warning or consultation has left business both confused, frustrated and unable to operate effectively.  We welcome the support made available to date, including the Chancellor’s Winter Economic Plan. However, where restrictions, including local, need to be imposed, businesses need to be proportionately compensated (this could include an expansion of grants to businesses forced to close or allowing such businesses to continue to access the full furlough scheme).  It has been unfair for Government simply to suggest that businesses are not viable or ‘Zombie-like’, when their position is a direct consequence of state restrictions as opposed to market or individual business decisions.

Test, Trace and Isolate

Businesses are taking all the measures required of them to ensure the health and safety of their employees within the workplace, and for this to work properly it needs to be underpinned by a fully functioning test, trace and isolate system.  Businesses would welcome the potential for local delivery, with many good relationships already established with local health and environmental protection. Private sector capacity, matched with government support, could be a significant game changer.

2. Review the Work-from-Home guidance for Covid-19 secure office-based business activities

The recent shift in Government guidance, which called for people to work from home if they can, accompanied by the statement that this could last for six months, has had a significant impact on businesses sentiment and activity.

This message, taken alongside the recently introduced wider restrictions, has severely dampened business confidence with many now anticipating that they will have greatly reduced business levels and activity for an extended period –likely until Spring 2021.  This impact is compounded by this approach effectively leading to the writing-off of the significant investment undertaken by businesses to ensure they were operating a Covid-19 secure environment.  Businesses made significant investments, in good faith, to meet Government guidelines, only to then see Government instruct businesses and employees not to use these Covid-secure office workplaces.

The long-term impact of office based businesses unable to use their Covid-secure workplaces is having severe and escalating impacts on employee welfare (as not all staff have accommodation suitable to long-term working from home), business productivity, innovation and survival, as well as having significant negative multiplier impacts on dependent sectors such as hospitality and retail.  In-turn, this is impacting the longer-term success of major cities.

We are calling on Government to support a more targeted approach, where businesses that can demonstrate that they have the necessary risk assessment and can operate a Covid-secure workplace, then office-based business activity should be allowed to continue at reduced levels.   This approach will need to be complemented by safe travel in the public realm and consequently we recognise that no pressure should be placed on employees to return to a Covid-secure office-based workplaces if they have concerns about such issues that are out of the direct control of businesses.

3. Improve the support package for sectors critically affected by Government restrictions

Government support for businesses and employees must recognise the differential and disproportionate impact of Government restrictions on key sectors (which have also led to differential geographic impacts especially in large cities) and we call-out two here: Hospitality and Aviation.

Hospitality, Tourism and Leisure

The hospitality sector has been particularly hard hit and after a small uplift in August, has been devastated by the latest additional restrictions. We would welcome an extension of the Coronavirus Job Retention Scheme specifically for the hospitality sector and call for small Covid-19 secure pilot events to be able to take place.

This is on the sound basis that events, particularly those aimed at B2B activity, can operate in a controlled environment and have clear systems in place e.g. for registering delegates as a matter of course.  Businesses should be allowed to continue with small-scale events activity and support this part of the economy, especially as many of these events directly create multiplier activity e.g. sales mini-conferences.

Withdraw imposition of Duty-free VAT and Extend temporary reduction in VATThe Government should not abolish tax free shopping for international visitors at this time, which would make the UK the only country in Europe without a tax-free shopping scheme and will only exacerbate the impacts of Covid-19 on our hospitality, retail and aviation sectors who rely on tax-free shopping for a sizeable portion of turnover.  We do welcome the temporary reduction in VAT levels for hospitality businesses until March 2021 and would strongly urge the Government to also commit to an extension to this until the end of 2021.

Aviation

The aviation sector, which encompasses almost all aspects of air travel and the activities that help to facilitate, including the airports, airline industry, aircraft manufacturing and research companies, has been impacted early, hard and continuously by Covid-19. Current travel restrictions and the absence of a testing regime mean that, along with a range of other factors, demand is unlikely to return to pre-Covid levels for some time.

We request that Government develops a specific survive and thrive plan for this sector that acknowledges its direct economic contribution to Greater Manchester, and its pivotal role in enabling the success of many other key sectors, such as higher education, the visitor economy and those that are international in their nature. Connectivity provided by airports is also key to driving increased export volumes and supporting inward investment work, both of which are critical to the government’s levelling-up agenda.  Continued weakening of this sector will result in long-term structural damage to the city region economy.

The plan should include direct financial support where appropriate, relief from certain fixed costs and the urgent development of a testing regime to enable quarantine periods to be shortened.

Business Representative Organisations include:

The Growth Company
CBI
Greater Manchester Chamber of Commerce
ICAEW
NWBLT
FSB
Marketing Manchester
MHA
pro-manchester