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Supply Chain Innovation 2021

More help needed for suppliers impacted by the pandemic

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Mike Cherry

National Chair, Federation of Small Businesses

Supply chains are the beating heart of the economy. They are critical for boosting the resilience and financial strength of smaller and larger businesses, bringing a genuine competitive advantage and make business sense. 


Supply chains have buckled under the weight of lockdowns. A huge amount of the support has been targeted to the retail, leisure and hospitality sectors, even though many suppliers have lost a significant part of their revenue as a result of restrictions.  

Suppliers that sell to businesses are not eligible for business rates relief and grant support. This affects a range of industries, from coach firms who would usually be running tours or driving supporters to football matches, to baggage handlers for cruise ships, laundry services for hotels and steak suppliers to restaurants. Their customers are closed, but they are not eligible for support.  

The Budget on 3rd March saw the Chancellor announce new waves of support for small businesses and the self-employed alike. But the challenge now is ensuring those in the supply chain benefit from these measures, not just those on the frontline. 

In total, 56% of those on furlough are in sectors outside of retail, hospitality and leisure and will mainly work for business-to-business suppliers.

Scale of the problem 

In total, 56% of those on furlough are in sectors outside of retail, hospitality and leisure and will mainly work for business-to-business suppliers. But only around 10% of grant support is available to those who fall out of these sectors.  

FSB research shows that 1,000,000 small firms have been left out of support measures. 

Firms which have suffered massive drops in revenue are still being charged tens of thousands in tax each year, even though their customers are banned from trading. 

Finding new solutions 

Our next step is to ask the Chancellor of the Exchequer what measures he can take to ensure that suppliers whose revenue has been impacted by COVID-19 restrictions do not pay tens of thousands in business rates. Also what plans he has to increase the level of discretionary grant support for those who fall outside of the retail, leisure and hospitality industries. 

As we build our economy back to its former glory, we need The Chancellor to protect our supply chains at all costs. 

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