Bell Ribeiro-Addy MP

for Streatham (and parts of Balham, Clapham Common, Tulse Hill and Brixton Hill)

Small businesses are being hit hard by Coronavirus. We should do more to support them – In My View (Column for South London Press)

May 15, 2020 | Articles

Bell Ribeiro-Addy Business

I recently found out that the person behind Clap For Key Workers (originally Clap For Carers) lives in Streatham: a small fact which typifies our area’s exceptional response to coronavirus. We’ve seen some amazing and original initiatives getting off the ground here. Whether it’s local people donating their used devices to disadvantaged school pupils, food banks managing to meet an 134% increase in demand, or mutual aid groups springing up to help the community, we’ve seen people pulling together and innovating. 

I’ve been impressed at how local small businesses have thrown themselves into the coronavirus response. Whilst the big chains have shut up shop, we’ve seen independent coffee shops giving away free coffee to NHS workers, computer repair specialists offering to repair laptops at no cost and one local firm laser-cutting PPE for care homes. 

Small businesses aren’t just the lifeblood of our economy, they’re the lifeblood of our community and they’re getting a raw deal. The UK High Street had already fallen on hard times before the current crisis came and put the brakes on trading. One study published at the start of lockdown suggested under current policy measures, up to 20% of the UK’s businesses would run out of cash by the end of April. The unfortunate truth about coronavirus business measures so far is that the smaller you are, the smaller your support. 

Small businesses already found themselves on an uneven playing field before the coronavirus. So far, Government relief has come in the form of saddling small businesses with further debt, whether it’s by offering them loans (at high interest rates) through commercial and retail lenders or effectively deferring their rent payments. 

As the Treasury offers no-strings attached loans to companies registered in tax havens, uptake on small business loans remains low. 2017’s business rates revaluation means the average small shop will see a £3,663 hike over the next 5 years, while large supermarket chains will see 6% reductions. It can’t be fair that some independent cafes contribute to the taxman at a higher effective rate than big High Street names. 

There’s a growing consensus that we can’t go back to business as usual when the crisis is over. The economic case for stronger Government intervention couldn’t be clearer and the stakes couldn’t be higher. The cost of bankrupt businesses, unemployed workers and lost tax revenue far outweighs the cost of acting. But allowing small businesses to go bust isn’t just bad policy, risking a deeper recession and job losses, it’s also a hammer blow to communities. That makes it all the more important for the Government to learn from mistakes so far and get its second round of support right. 

This article first appeared as a column in the South London Press on Friday 15th May 2020.