A leading business group has called for people to be given vouchers to spend in local shops as a way of kickstarting the economy after the coronavirus lockdown.
The British Chambers of Commerce (BCC) has called for “swift, substantial and immediate action” after a survey of thousands of businesses revealed historic levels of problems in the UK economy.
The BCC’s quarterly economic survey found that the coronavirus pandemic was having a far worse impact on businesses than the 2008-9 credit crunch, with sales, orders and cashflow at the lowest level since the survey began in the 1980s.
And as Prime Minister Boris Johnson announced a £5bn investment in infrastructure projects, the organisation said more immediate measures were needed to keep thousands of businesses alive after three months of lockdown.
Among the more unusual suggestions from the BCC was the possibility that every household in the country be given a voucher to spend locally in the hope that it would raise consumer confidence and get the economy moving again.
BCC director general Dr Adam Marshall said: “Our results demonstrate the need for swift and substantial action. The Government has one chance to jump-start the economy and business confidence over the coming weeks – and they must take it.
“Business communities across the UK want to see a clearer, bolder roadmap to recovery that helps them restart, rebuild and renew. The UK cannot meander its way back to success in this era of uncertainty.
“The only way to re-kindle business and consumer confidence is to demonstrate an absolute and unshakeable focus on boosting the economy over the coming months.”
The BCC’s regular survey of companies around the UK returned unprecedented results for the second quarter of 2020, with 11 of the 14 indicators being measured falling to their lowest level in the survey’s 31-year history.
Two-thirds of the 7,700 firms surveyed reported worsening cash flow, while investment in equipment and staff was at the lowest level on record.
The percentage balance of firms reporting increased domestic and export sales is substantially lower than the worst quarter of the 2008-09 recession, and hopes of a swift economic recovery have been dashed with reports that orders have slumped for both services firms and manufacturers.
The BCC survey will raise pressure on the Government to increase support for the business community, with the Prime Minister indicating that Chancellor Rishi Sunak would next week set out a plan to support the economy through the first phase of the recovery.
BCC has called for a range of measures to be considered, including reductions in employer National Insurance Contributions, relief on business rates, support for apprenticeships, and “restart vouchers” or a temporary VAT cut to stimulate demand.
The BCC survey is not the first to highlight huge issues in the UK economy, with the North East England Chamber of Commerce’s most recent survey highlighting drops in sales of more than 50%, while a study by the Chartered Management Institute found that a third of businesses in the South West were poised to make redundancies when the Government’s furloughing scheme comes to an end.