Almost a fifth of small businesses are at risk of collapsing within the next month as they struggle to secure emergency cash meant to support them through the coronavirus lockdown, according to research by an accountancy network.
The chancellor, Rishi Sunak, has pledged unprecedented aid to companies to try to cushion the blow from much of the economy shutting down but businesses and politicians have raised concerns that there are gaps in the schemes.
Some 18% of small and medium-sized enterprises (SMEs) either probably or definitely will not be able to obtain additional cash from the government to survive for a four-week period, according to the Corporate Finance Network.
Its accountancy firm members estimated that almost a third of their 13,000 small-company clients from around the UK would be unable to acquire the cash needed to ride out an extended, three-month lockdown.
Rachel Reeves, the Labour MP who heads the business select committee, wrote to the chancellor on Tuesday outlining concerns with the schemes to support companies.
“The challenge now is getting the money out of the door to support businesses before it’s too late,” she told BBC radio on Wednesday. “There are many businesses who if they don’t quickly access this cash they are going to go under.
“That will have huge consequences for employment and also our ability to grow the economy when this pandemic has passed. If businesses collapse they won’t be able to ensure our economy can recover. They will be lost for ever.”
The banking industry body, UK Finance, has said it is running the schemes in line with the government’s design.
In her letter to Sunak, Reeves said the history of support to the banking sector meant they had to step up. The industry and regulators at the Bank of England have said that banks are well positioned to support the economy through the crisis. The banks on Tuesday night agreed to scrap dividend payouts to shareholders after Bank of England pressure.
“Banks were kept afloat by government and taxpayers during the financial crisis,” Reeves wrote. “I would urge them to play their part in helping small and medium-sized businesses through this crisis.”
ALBANY — Business owners across the Capital Region were left picking up the pieces of their shattered storefronts Monday, after a weekend of civil unrest that upended much of the United States and swept through the Albany area.
The destruction in Albany late Saturday night followed a peaceful daytime protest against the continued mistreatment and killings by police of black men, including George Floyd, whose death last week after begging for breath under the knee of a Minneapolis police officer outraged the country.
The disturbances began in the city’s South End and swept northward on Pearl Street, then west along Washington and Central avenues all the way up to Colonie Center on Wolf Road. Businesses — many of them owned by minorities — were vandalized, burglarized and looted, causing more than $1 million worth of damage across the area, Albany County Executive Dan McCoy said Monday.
The violence came just as businesses were beginning to recover from the coronavirus pandemic.
“[The pandemic] is nature. It’s above human control,” said Kwasi Addo-Baffour, owner of Breakthrough African Market on Central Avenue. “But this? This is just crazy.”
Addo-Baffour was awoken at 2 a.m. Sunday by his alarm company, alerting him to an issue at his market. He arrived to find his front door smashed and cash missing from the register. He spent two hours cleaning up his shop, and though Central Avenue was packed with looters, he said he did not see a single police officer. He wonders if the damage would have been as wide-spread if officers had made their presence known along the street.
Addo-Baffour said he thought his shop would be spared from destruction because it’s a minority-owned business that is clearly labeled as catering to minorities. Surveillance video shows four people breaking into his store. Three of them were white men, he said, and though his door was shattered and his cash gone, the looters left much of the food and goods imported from Africa in his store untouched.
That leads Addo-Baffour to believe that the bulk of the looters had nothing to do with the daytime protest or its message.
“This is not a protest,” he said. “This is no justice. If you’re fighting for black life, why would you break into a black store?”
Glass was still missing Monday from the front door of the Boost Mobile operated by Najeeb Khan on Central Avenue. The brick that came crashing through the glass still lay in a corner. Droplets of blood, apparently from a looter, were visible on a display counter that used to hold phones.
The looters took $40,000 worth of phones and his entire cash register, Khan said. He couldn’t speak to the motivation of the group that looted his shop, but said one thing was clear.
“They’re obviously not concerned about humanity,” Khan said. “If they were, they wouldn’t have done this.”
The destruction left much of lower Central Avenue looking like a town bracing for the impact of a Category-5 hurricane. Windows and doors were boarded up, both on businesses that experienced damage this weekend and those anticipating continued unrest.
In an effort to provide some relief to businesses affected by the rioting, Albany Mayor Kathy Sheehan announced on Monday that the city’s Small Business Facade Improvement Program will be waiving the 50-percent match requirement for businesses to receive funding under the program.
“The sun rose on Sunday morning and we saw the damage that was done to small businesses that are really the lifeblood for our community,” Sheehan said. “These are small businesses, many of them owned by people who live here in the city of Albany, many of them minority-owned businesses, and they also provide essential services in neighborhoods that are under-serviced. So we want them to be able to reopen quickly. We want to be nimble, we want to be fast.”
Mark Brogna, owner of Capital Wine & Spirits on Lark and State streets, considers himself lucky. His shop was also looted early Sunday morning, but the intruders were able to grab only about five bottles before being spooked by his shop’s alarm.
“It gave up a good fight,” Brogna said of the glass door that was kicked in by the looters. Brogna stayed in his store late Saturday, expecting trouble. He left just after 2 a.m. His door was kicked in around 3:30.
The confluence of a pandemic and civil unrest could not have come at a worse time for small business owners, he said. “It’s very hard,” Brogna said. “It’s difficult. It’s stressful. It’s worrisome. What are we doing right? What are we doing wrong?” He anticipates keeping the plywood that now reinforces his shop’s windows up until next weekend, at the earliest.
“I take pride in the way the store looks,” Brogna said. “This just looks sad.”
Now, business owners across the region will have to contend with the possibility of more unrest in the upcoming evenings. Addo-Baffour, for one, isn’t taking any chances at his shop when night falls.
But politicians tend to be split along partisan lines over their reasons for reforming the law. While Democrats supporting reforms generally aim to hold tech platforms to similar standards as publishers when it comes to what they see as objectionable content, Republicans have taken issue with what they claim is a biased method of removing content that silences conservative voices. Tech platforms have repeatedly denied removing content based on partisan beliefs.
In his interview Monday, Carr said Facebook CEO Mark Zuckerberg was generally taking a better approach on content moderation than Twitter’s Dorsey.
“I think Zuckerberg is right, Facebook is wrong. It’s kind of veered from some of Zuckerberg’s instincts from time to time,” Carr said. “I think there’s been a big distinction that last couple weeks between Facebook and Twitter where Mark Zuckerberg has said, look, put my political beliefs to the side and he’s been expressing them and good for him, that’s not how I’m going to support my business, my business is about supporting free speech. Contrast that with Jack Dorsey who looks like he’s now weaponizing his corporation to pursue his own partisan political beliefs.”
Twitter placed a “public interest notice” over a recent tweet by Trump for the first time, obscuring a message about the protests in Minneapolis over the killing of George Floyd while in police custody. Twitter said Trump’s post, which said, “when the looting starts, the shooting starts,” violated its policies about glorifying violence. While the company would normally remove such a post by other users, Twitter invoked its June 2019 carve-out for world leaders, which allows it to maintain posts from such figures that are in the public interest but otherwise violate its policies.
Addressing the question of how the perceived political makeup of tech companies should factor into the assessment of bias, Carr said, “I think at least from a public policy perspective, if you were holding yourself out there as a neutral platform, at least from a political perspective, and then you stack the deck with hardened partisans, I think that undermines — putting the government hat aside — I think that undermines the user-base’s confidence.”
Facebook did not immediately respond to CNBC’s requests for comment. Karlan and Twitter declined to comment.
Shoppers rushed back to high streets and retail parks on Monday as the reopening of car showrooms, markets and some Ikea stores marked the easing of lockdown restrictions in England.
The number of shoppers out and about jumped 31% across all retail destinations by 5pm in England compared with last week’s bank holiday Monday, according to analysts at Springboard. For the UK as a whole, shopper numbers rose 28%.
“It appears that even though only markets and car showrooms have opened today in addition to essential stores, shoppers are heading back into bricks and mortar destinations,” said Diane Wehrle, Springboard’s insights director.
Shoppers flocked to the Swedish furniture chain Ikea, which reopened 19 stores for the first time since March. People queued from 5.30am in some locations with local reports of 1,000 people outside the Warrington store and people waiting several hours to shop in Croydon, south London.
Ikea stores were allowing in only one adult and one child per household and play areas and restaurants remained closed.
A spokeswoman for the chain said: “Whilst customers have experienced long queues at times, these planned measures are in place to ensure everyone’s safety and we’re incredibly grateful to the public in playing their part to help keep everyone safe.
In some stores where we’ve seen strong demand, we’ve taken appropriate decisions to open early for browsing and to temporarily close our car parks to help ease pressure and reduce waiting times.”
Wehrle said the number of shoppers at all retail destinations was still more than 60% down on the same time last year, but people were now willing to venture out. Monday’s shopper numbers were partly lifted by those visiting coastal towns and historic areas to make the most of good weather as well as the gradual reopening of a wider range of shops.
“There is a change of mindset. People are regarding lockdown as not over but in its dying phase,” Wehrle said.
Non-essential retailers have been closed across the UK since 23 March, when the lockdown to limit the spread of coronavirus started, but retailers are keen to reopen as trading online has not made up for store closures.
Under new government rules, car showrooms and outdoor markets selling non-food items were allowed to reopen from Monday. Food market stalls in some areas have been able to operate since May, but many owners have chosen not to do so.
While the vast majority of non-essential stores, including clothing, shoe and toy stores, will not reopen until 15 June, a range of other retailers selling products classed as essential such as DIY, furniture and bicycles, have gradually been reopening under lockdown.
Restaurants remained closed.
As shopper numbers increased, so too did the number of people travelling.
Motoring organisations reported a much busier start to the week on roads. An AA spokesman said breakdown callouts on Monday had peaked from 9am, an hour earlier than the pattern during lockdown, indicating the return of a morning rush.
Data from the AA until the end of Sunday showed that the weekend had been the busiest since the start of lockdown, with traffic at around 80% of normal levels, or about 15m cars on the road.
Motor traffic on major roads in London was at just under 80% of normal levels between 7am and 10am, about 3% higher than last week. The partial reopening of primary schools is likely to have added to traffic, despite calls for parents to walk or cycle rather than drive children to school.
The number of passengers using the London Underground on Monday rose by about 20% from last week, according to early data from Transport for London. Tube travel in the morning peak was about 11% of pre-coronavirus levels, with 124,000 journeys between 7am and 10am, compared with 106,000 at the start of the last working week, Tuesday 26 May. Daily totals last week had grown to 8-9% of normal 2019 passenger figures.
Train operators said there was little difference in passenger numbers on Monday, with people still urged to use public transport only for essential travel. Govia Thameslink Railway, the operator of Britain’s biggest commuter network, said there had been a very small increase compared with last week.