Small Business Owners Afraid They Will Receive No Financial Support After Coronavirus Advice
After Prime Minister Boris Johnson announced yesterday that we should all commit to "social distancing" as much as possible in a bid to slow the spread of coronavirus, business owners are now deeply concerned over their future.
The government advised staying away from places such as theatres, clubs and pubs, but fell short of instructing them to shut down.
As a result, business owners have been taking to social media to explain they felt they'd been 'thrown under the bus'.
Many have said that by asking the public to steer clear from pubs, clubs, cinemas and theatres that must still remain open, it is not only preventing businesses from receiving customers, but also being unable to claim losses through insurance.
One bar and restaurant in Hertfordshire took to Facebook to say: "In light of tonight's phenomenal decision by the PM to completely throw the hospitality industry under the bus, we will now be closed Tuesday and Wednesday this week.
"As we have steak night and Mothers Day coming up, we are currently planning to remain open over the weekend. After, who knows. We'll be in touch regarding bookings tomorrow."
Another pub in Hertfordshire added as part of a statement: "The government announcement has left us in the worst possible scenario.
"Failing to take responsibility they have put the onus on us, without forcing closure we can't claim compensation and have no legal protection.
"If we stay open we continue to rack up overheads on drip fed trade but if we close we have no insurance and zero income."
Others took to Twitter to express concern. One said: "@BorisJohnson has just doomed an entire industry by telling people not to attend the theatre. By not enforcing a shutdown, production insurance will not apply so producers and shows will go bankrupt, and tens of thousands of people will be without pay."
Another added: "I have spoken to insurance providers three times today. All of them are clear that there is no protection as long as the protective steps you take are "voluntary" and "proactive". Thousands of small businesses will collapse because the PM is playing around with semantics".
A Labour MP, Ian Murray, expressed his own concerns on social media: "The government needs to formally order the closure of pubs, clubs, cinemas, and restaurants otherwise they can't claim insurance. They will merely close and never reopen. These businesses don't have large cash reserves and many survive week to week."
The general assumption is that businesses cannot claim on their insurance until forcibly closed.
However, it is unclear whether these businesses would be able to claim on insurance either way.
On the Government website, it states: "Businesses should check with their insurance provider if they are covered.
"Many businesses are unlikely to be covered as most business interruption insurance policies are dependent on damage to property, which will exclude pandemics."
I have spoken to insurance providers three times today. All of them are clear that there is no protection as long as the protective steps you take are "voluntary" and "proactive". Thousands of small businesses will collapse because the PM is playing around with semantics. https://t.co/abAOQa720r
- Satbir Singh #GratuitousSikh (@SatbirLSingh) March 16, 2020
Amid the outrage, the government has promised to try and help businesses where possible, outlining on its website some measures being put into place.
The government has promised to "bring forward legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19."
It also says it will "increase the Business Rates retail discount in England to 100 per cent for the 2020 to 2021 tax year for properties below £51,000 rateable value.
The relief will also be expanded to the leisure and hospitality sectors in response to COVID-19.
The government is also providing additional funding to local authorities to support small businesses.
It says businesses and the self-employed may be eligible to receive support with outstanding tax liabilities, too but this will be agreed case-by-case.
The government added on its website that the British Business Bank is set to support businesses access loans and overdrafts by proving a guarantee of 80 per cent on each loan, to ensure lenders have confidence in providing loans to SMEs.
However, nothing feels clear to any business owners or the self-employed just yet and the feeing in the air is of uncertainty. And it's not just pubs who are being affected, it's hair and make-up artists as well as general freelancers who have lost work due to businesses closing and not needing their services.
The self-employed are also particularly worried given that this group of people currently will not receive statutory sick pay if they fall ill, which is why a petition has been set up to include those who are at severe risk of losing money during these uncertain times. You can sign the petition here.
Later today in the daily COVID-19 update from Boris Johnson, we can expect some more guidance on what help businesses will receive.
Tyla will update you further as this is announced.
Featured Image Credit: PA