Chancellor Rishi Sunak launched a £330bn business rescue package earlier this week, which includes a business rates holiday, interest-free loans and a cash grant for those businesses with a rateable value of less than £51,000.
While many of the suggestions matched those made by the National Association of Jeweller’s chief executive officer in his letter to the Prime Minister, do independent jewellers think this will be enough to save businesses from the effects of the general public being told to stay at home as much as possible.
Owner of Fabulous Jewellers in Leamington Spa, Jo Stroud, welcomes the rescue package, with the 100% business rates reductions and the grant money in particular being seen as a positive step at this moment in time. However, if the high street is to continue to suffer if people are told to stay at home for months on end, the small business owner believes more will be needed to help.
She tells Professional Jeweller: “If retailers are closed for a month, then this will all help enormously. But the challenge is in not knowing how long we might be closed, or for how long people will be told to avoid the high street. If this goes on for a number of months, as seems very likely, then this package is simply a drop in the ocean. We will then need direct help to pay salaries, if we are to keep our teams employed with no revenue coming in. For most independent jewellers, substantially more help will be needed in a matter of weeks, not months.”
Daivd Clark of W E Clark Jewellers in Sussex agrees with Stroud.
While the rescue plan is of course welcome, he is concerned it is not enough to look after his staff and their livelihoods if the outbreak continues to escalate. And at a time like this, that’s the most important thing, he explains, as plans for business growth are simply not worthwhile at the moment.
“We are going to need more if at the end of this we are to be operational as a country of small and medium businesses,” the managing director says. “The business rates and the £25k grant will indeed help, but with 15 staff that I am responsible for, this money will not last long. I am concerned for my staff, and their lives and livelihoods too, so really at the moment all thought of business growth is out the window, we are now in survival planning mode.”
He continues: “Our business has seen many challenges over the 200 years we have been established, but even against the biggest of the challenges it may have encountered this will be the biggest- absolutely no doubt. I am completely focused on putting everything I have into getting the business through this, and I am not easily beaten.”
For Harriet Kelsall Bespoke Jewellery the measures announced earlier this week are not enough. While she agrees the package may be useful for single store business owners, as a company running three retail units, it’s a different story.
The namesake business owner explains: “Our insurers, like most, will not cover issues like this during a pandemic so we have nowhere to go there. The government have said that they will give a grant of £28,000 to those within the low rateable value threshold, but as we have 3 separate premises, 2 of which are well under the threshold and the third is just over. So we don’t think this will apply to us because if we combine all three we will go over this. So we think we will probably not be able to claim this grant. And even if it does apply to us, it will not go far to cover the wages of our team of 40. In addition to this, we have plummeting precious metal prices so our stock and metal is worth a lot less than it was before this crisis.”
She adds: “We are a financially stable and strong business but nobody could have expected or financially managed for this situation.”
When asked what more could be done, Kelsall would like to see things put in place to ensure the wellbeing of her staff.
She says: “The biggest problem for every jewellery business will be how to pay their wages bill. Staff will worry about paying for their mortgages in particular. Then of course there is our rent on our premises. I hope that the government will put something in place to help with these three things because otherwise many, many business will go under and many staff will be unable to pay their mortgage payments.”
Clark suggests: “I think that we need to see a freeze on PAYE and NIC for now, I would also see that there needs to be a discussion about VAT and Corporation Tax. This is going to be a very big challenge for the government to overcome I understand, as their tax receipts will be massively impacted.”
The NAJ has now sent an open letter to Boris Johnson calling for further clarity and support on key issues that impact the entire jewellery trade.
In the letter signed by the CEO, the Association points out liquidity issues which could greatly affect Britain’s jewellery businesses, and action from the government such as declaring high streets off-limits can help retailers claim on their insurance for example.
The letter also ‘implores’ the government to work with HMRC to create payment plans for deferring PAYE, VAT and corporation tax and offer a universal basic income until the crisis is over.
Furthermore, the letter calls for incentives to support UK businesses drive consumers back to the high street.
“Urgent action from our government can make a difference to the jewellery industry,” says NAJ boss, Simon Forrester. “We are doing what we can to support each other but at this stage direct and pressing leadership is crucial. We now await consultation alongside other representatives of high street businesses on the decisions that will for a number mean their survival.”