Taking the Full Force of a Perfect Storm

The Chamber of Commerce has called for urgent gov action to help local businesses after Treasury Minister Alf Cannan said he is yet to receive evidence of wholescale disruption to businesses on the island as Covid cases rise and just before the Economic Recovery Group announced a slew of support avenues.

Since the CoC’s call, the treasury has announced a temporary increase to the rate of ‘Incapacity Benefit’ for the first 14 days absence from work, bringing it from £86.55 per week to £230 to support those who may be isolating due to Covid-19.

In addition, the Economic Recovery Group has released a trio of support avenues for businesses and self-employed people. In a statement they said: ‘Support will be available for those in customer facing roles who are unable to work from home (such as those in the retail, catering, leisure and lifestyle sectors) and are affected by self-isolation requirements of staff or drop in customer demand. Applicants will fill in one application form and will be entitled to claim either a grant equivalent to one years’ business premises rates payment, or a lump sum payment of £1,000.

‘The Business Premises Support Scheme will provide eligible applicants who have commercial premises with a grant payment equivalent to one year’s rates bills. The Coronavirus Business Support Scheme (CBSS) will provide a payment of £1,000 to businesses and the self-employed who do not have commercial premises (or for whom the sum is greater than the cost of their rates). Both grants are subject to evidence of a decreased turnover of 25% or more against July 2019 and can be used toward any business overheads, staffing costs, to alleviate cash flow issues.’

Mr Cannan said: ‘We acknowledge that many businesses find themselves in a challenging position and that the rise in COVID-19 cases has increased the number of staff that are unavailable to attend their normal place of work as well as consumer demand. While isolating due to illness remains the correct personal response, we appreciate that this is inadvertently impacting some businesses, individuals and the self-employed and particularly those in customer facing roles.

‘As well as accessing these schemes once launched, I would also ask businesses where possible to access the full range of support already available to them, which include access to Government backed working capital loans, Business Improvement Scheme, and importantly the Business Adaptation Grant.’

The CoC conducted a survey last week of 63 businesses and found that ‘many businesses in the island’s customer facing retail and lifestyle sectors are financially unsustainable due to the combined impact of self-isolation rules, and high levels of debt’.

CEO Rebecca George said: ‘Whilst the Government believes that ‘living with Covid’ is the beginning of the end of the pandemic, the island’s small to medium sized businesses – and particularly those customer facing businesses with younger workers – are currently taking the full force of a perfect storm. Our survey revealed that with income reduced by as much 80% compared to the same period in 2020, and limited employees to call upon due to self-isolation, many business owners described the week as the worst they have experienced during the pandemic.’

The call comes after the Minister was asked by Claire Christian MHK what plans the Treasury had to provide financial support to businesses and the self-employed who may be affected by 10 day-isolations related to the track and trace policy.

Mr Cannan said: ‘I have yet to receive that sort of evidence that she is reporting of wholescale disruption to economic figures and turnovers provided by businesses. I do appreciate that this is a difficult time and it is somewhat chaotic, the Economic Recovery Group continues to monitor the situation and continue to receive information from businesses directly from DfE. If we believe or find out that the situation is so disruptive as to cause disruptive widespread economic impact such as businesses continuing to lose 30/40/50% of their turnover, then the ERG will have to seriously consider whether or not to turn the support mechanisms back on.’

The CoC’s retail sector lead, Andy Corrie, said: ‘It’s a vicious cycle: customers cancel, key employees like chefs and designated officials in licensed premises are told to isolate at short notice, so businesses are unable to earn money whilst their workers lose income for at least 10 days, depending on the time lag to get a PCR test. These workers and businesses need help quickly.’

Businesses on the island can also apply for support from the Manx Solidarity Fund who have so far given out £600,000 to local individuals, businesses and charities since it was set up last year. A spokesman said: ‘Despite the success of the vaccination programme, there may well be sections of the community which are still suffering financially as a direct result of the pandemic. Therefore, the Directors of the Fund are keen to highlight that applications for support will still be welcomed. Anyone interested in applying as an individual, or on behalf of an Isle of Man-registered organisation, should visit www.manxsolidarityfund.com/apply to check eligibility criteria and to make an application.’

Claim forms for the incapacity benefit can be downloaded from the Social Security pages on gov.im or obtained by emailing incapacitybenefits@gov.im, you can also see the full results of the CoC’s survey by visiting here.