How Gloucestershire is set up to cope with dire economic forecast
By Rob Freeman | 15th April 2020
The UK economy could shrink by a record 35 per cent by June according to one forecast as the coronavirus crisis takes hold.
Chancellor Rishi Sunak stressed the Office for Budget Responsibility's predictions were only one view of what lies ahead, but admitted the coming months were tough for businesses.
Acknowledging the government could not protect every business, Mr Sunak said: "These are tough times and there will be more to come.
"We came into this crisis with a fundamentally sound economy, powered by the hard work and ingenuity of the British people and British businesses."
The OBR forecast expects the economic impact of coronavirus to be temporary with the Chancellor pledging the government is "not just going to stand by" without supporting the economy.
Punchline asked business leaders in the county for their reaction and how they felt businesses in the area were set up to cope with the crisis.
David Owen, Chief Executive of GFirst LEP
"Historically, Gloucestershire's economy has been quite resilient. The county bounced back strongly after both the flooding in 2007 and the recession in 2008.
"In addition, Gloucestershire's economy is pretty diverse. We have strength in a number of sectors - cyber, advanced engineering and manufacturing, food & drink and tourism to name a few - so our eggs aren't all in one basket.
"Having said all that, we've had more than 500 responses to our business survey that ask how the coronavirus outbreak has affected your business and the results are quite worrying, with cashflow issues and a downturn in sales being a common theme.
"On a positive note, our local authorities are working hard to get the Government's Small Business Grants out the door to keep businesses afloat, with more than £55million going out in the last week and more to follow this week.
"The GFirst LEP team will continue to work hard to make sure that we communicate as quickly as possible the very latest business support from the Government."
Sam Holliday, Development manager for Gloucestershire of Federation of Small Businesses
"There is no denying the situation at the moment does look very worrying indeed. We have all seen and heard the various projections that are coming forward about how the economy might look in the future, but for many small businesses their primary focus is getting through this period and dealing with all the issues they face at the moment, rather than the issues they may face tomorrow.
"The best chance we have of as many of our small businesses as possible surviving this period so they can be part of the rebirth of the British economy we all desperately want to see is for them to be given as much support via grants, loans and other practical forms of financial assistance as is feasible.
"Our small businesses have shown time and time again when the going gets tough they're incredibly resilient.
"Yes this may be the biggest fight many of us have ever had but for once the old cliche of 'we are all in this together' has never been more true.
"We all need to make sure we do everything we can to support one another and one another's businesses to help us get through today and then truly prepare for tomorrow."
Ian Mean, Gloucestershire director of Business West
"Just when he thought things were going pretty well at the Treasury, Chancellor Rishi Sunak was hit in the solar plexus. And it came from friends at the independent Office of Budget Responsibility.
"To put it mildly, the OBR painted a shocking scenario of a sharp decline in the UK economy and public finances if the coronavirus pandemic continued for another three months. They claimed the economy could slump by a third and up to 3.4 million unemployed.
"To put it into perspective, the OBR's scenario paints the gloomiest possible year for the economy since 1719.
"This was a tough day for the Chancellor. But as companies seek to use his economic lifeboat packages to survive he will face other difficult days.
"He said the furlough portal would open on April 20 and after a few days of checking money would flow into company accounts. That sounds very tight when many companies have an April 25 pay day for staff.
"Tough times and business faces very difficult decisions over the next few weeks."
Kevan Blackadder, Director of Cheltenham BID
"The ministers standing in for the Prime Minister at the daily press conferences cannot have left many businesses optimistic for the future. The performances of Dominic Raab and Priti Patel in particular have ranged from confused to chaotic.
"But they will have been impressed by the new boy at Number 11, Chancellor of the Exchequer Rishi Sunak.
"Yes, perhaps he has had the 'easy' job of announcing handouts to businesses that desperately need them, but he's done so with a realism and clarity that has been refreshing.
"And so it was yesterday with his message that not only are we in tough times but that there are tougher times ahead.
"He could have claimed that his initiatives should be enough to protect every business. He did not. We will lose businesses that, until this awful virus came along, would have had a relatively secure future.
"That impact will be felt in Cheltenham, where like every town and city in the country, retail and food and drink businesses were already struggling to survive, mainly because of the impact of online businesses and unrealistic rents and business rates.
"That's why Cheltenham BID has been calling on landlords to show the same realism we are getting from the Chancellor.
"Don't expect your tenants to be able to pay their rent in full and on time. Look after them now and they'll be there for you in the future.
"The UK economy is going to shrink, but so is every economy in the world. With realism and hard work, we can get through this."
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