Billionaire businessman and philanthropist John Caudwell has outlined a series of steps he believes the Government needs to take to address the economic challenges posed by Covid-19.
The former owner of Phones4U and the founder of the Caudwell Children Charity – who is originally from Stoke-on-Trent – discussed the impact the pandemic is having on SMEs during an appearance on Good Morning Britain with Piers Morgan this week.
During the interview, Mr Caudwell talked about how he believes most people are going to come out of lockdown much worse off then when they went in and that “£1 spent now will be so much better rewarded than not spending money.”
Speaking from Staffordshire, he said: “The Government are absolutely not putting enough money into the economy, there has never ever ever been a time in history where £1 spent will produce better results from the Government balance sheets in the future.
“£1 spent now will be way way better rewarded than not being spent now so it’s absolutely crucial.”
He added: “At the moment, people are going to come out of this lockdown much worse off than they went in.
“Eighty per cent wages on furlough, yes it’s great but it’s not enough because the simple fact is that most people’s disposable income would be that remaining 20 per cent. So people are going to come out of this furlough, on average, broke. How is that going to rejuvenate the economy?
“We’re also going to end up with probably two to three million unemployed as a consequence of the Government doing nowhere near enough to protect jobs, especially in the SMEs.
“The larger companies are not such a big problem because they will lobby the Government, or go to the Government independently, and try and lobby for support.
“It’s the 6,000 SMEs that employ 60 per cent of the employees in the UK – that’s 16 million – and they are heamorrhaging. They are not getting the support.
“You can hear endless stories of them going to the banks for a loan and being turned away and that is because the Government have set a 20 per cent equity state that the businesses themselves have to put up to get a bank loan, but also, in addition, the banks are left to negotiate interest rates, so the banks are going to treat this purely commercially.
“This is not a time to treat things commercially, this is a time to save businesses. It takes years and years to grow businesses and to grow jobs and it only takes a matter of weeks to destroy them.”
John concluded: “Failure to act quickly and appropriately will move us into a depression, not just a recession, which will do more damage to people’s live and the fabric of Great Britain than the virus itself. Recession is already certain, but depression is not.”