FSB has been in close contact with the UK, Scottish and Welsh governments and Northern Ireland Executive throughout each phase of the coronavirus crisis. David Adams looks at the work done so far and the ongoing effort to ensure those left out are not forgotten about.

As concern about coronavirus grew in February and March, FSB was urging the 
UK Government and devolved administrations in Scotland, Wales and Northern Ireland to make preparations to support small firms.

“We started off looking at what the economic impact of this virus could be,” says Martin McTague, FSB’s Policy Chair. “We advised the Government that a really strong support package would be needed, including money to replace the wages of those who would otherwise be made redundant.”


At the end of February, FSB launched its Covid-19 website hub, providing its members, and the wider small business community, with crucial guidance on preparedness, and highlighting resources that could help. A rapid communications campaign was deployed, and FSB appeared on mainstream broadcast media as an expert voice on the matter.

The first part of a support package was announced by Chancellor Rishi Sunak in the Budget on 11 March. Measures included the news that workers advised to self-isolate would be entitled to statutory sick pay, and that businesses with fewer than 250 employees would be refunded for sick pay payments for two weeks. Small businesses would also be able to access business interruption loans, and Mr Sunak announced a business rates holiday for small businesses in England in the retail, leisure and hospitality sectors (the devolved administrations are responsible for business rates system in their nations, and also took action – see below).

Within days, it was clear that further action was needed as the economy slowed. On 20 March the Government made another announcement in line with FSB lobbying, launching the Coronavirus Job Retention Scheme – now known as the furlough scheme. 

FSB also led calls for support to be extended to self-employed workers, and on 26 March the Chancellor announced the Self-Employment Income Support Scheme. Mr McTague says FSB fought for this “almost on our own”. 

Its influence was also visible in the establishment of the Small Business Grant Fund in April, which provides grants of between £10,000 and £25,000 to businesses in England and is mirrored by similar schemes elsewhere in the UK. By mid-May more than 600,000 small businesses had received about £7.6 billion in cash grants, and FSB was monitoring how quickly and efficiently local authorities were distributing the grants to businesses. 

Some smaller businesses reported difficulties in accessing Government-backed business interruption loans, with some lenders reluctant to lend smaller amounts. The solution, again advocated by FSB, was the Bounce Back loans scheme, launched in the first week of May and comprising loans 100 per cent underwritten by the Government. More than a quarter 
of a million companies applied for the loans during the first week after their launch in May.

Gaps in support

Mr McTague says the guiding principle to the FSB’s work to date has been to encourage Government to “make every scheme as generous as possible, to make it reach as far as possible, and to make it start as soon as possible”. 


But the urgency needed to help a majority of businesses has inevitably resulted in gaps in provision. Loans and grant schemes based on the business rates system are not always applicable to businesses that do not pay business rates, such as those using shared offices or running businesses from home. 

Self-Employment Income Support Scheme support is based on the submission of previous tax returns by sole traders, so does not help self-employed people who have set up limited companies, sole traders who usually earn more than £50,000 but are now in serious financial difficulty, or those who have not been self-employed long enough to have filed a tax return.

“So we have a lot of members who are getting help – but also a lot of members who aren’t,” says Mr McTague. “We have to keep doing everything we can to try to fill those gaps.” 

FSB’s work with the UK Government is complemented by similar efforts within the governments of Scotland, Wales and Northern Ireland. Although much of the support is available for small businesses throughout the UK, governance of business rates outside England is devolved to Edinburgh, Cardiff and Belfast, and there are also some differences in the way businesses can access grants and loans.


In Scotland, there was a short period immediately after the Budget when it looked as if Holyrood might develop a support programme that differed from that announced in Westminster. But the rapid course of events and the launch of further UK-wide measures including the furlough scheme meant the Scottish Government ended up adopting a similar approach to property grants.

FSB harried Scottish Government bodies and local authorities to ensure businesses received the cash they needed as quickly as possible. It also handled members’ queries, which multiplied at the start of the lockdown as members tried to clarify how to obtain support and whether or not they could stay open. FSB Scotland Policy Manager Susan Love thinks pressure applied by the FSB at this point persuaded the Scottish Government to improve the clarity of its communications.


Scotland also faces challenges related to the tourism sector, which employs about 250,000 people in Scotland and brings about £5 billion into its economy every year. The crisis could not have arrived at a worse time, as the peak tourist season runs from April to September. 

In late April, following lobbying from FSB, the Scottish Government announced the launch of a £185 million hardship fund, including support for the newly self-employed, a creative, tourism and hospitality hardship fund, and a pivotal Enterprise Resilience Fund for small businesses “vital to the national or economic foundations of Scotland”. When these were oversubscribed, ministers in Edinburgh expanded the help. 

“At the moment we are making sure that these measures get delivered and businesses get the support they need, but we’ll be continuing to identify further gaps in the provision of support,” says Ms Love. In May, FSB pressure was instrumental in ensuring that financial help was expanded to include businesses that share properties, such as start-up hubs and indoor markets, and for firms that aren’t on the rates system, such as some B&Bs. It also helped secure the creation of a new discrete fund for B&Bs excluded from other help.


Immediately after the Budget, FSB Wales lobbied the Welsh Government to match the UK Government’s commitment to support businesses. “We worked intensely with Welsh Government in the immediate aftermath of the Budget, including writing an open letter to the First Minister,” says Ben Francis, Wales Policy Chair. “Within a 24-hour period we were able to push Welsh Government to commit to matching the announcements in the Budget for businesses in Wales.”

Just before the UK Government announced support for the self-employed, the Welsh Government announced it would use £1.4 billion to fill the gaps left when the UK Government announced its package. Further pressure from FSB has helped keep this support in place, alongside UK Government schemes.

At the end of March, the Welsh Government announced the launch of an Economic Resilience Fund, offering further grant funding to businesses and social enterprises. An initial fund of £300 million was paused by early May, and after FSB campaigning, Welsh Government subsequently announced £100 million in grant funding for self-employed, start-ups and non VAT-registered firms. “These were all gaps FSB Wales had identified and campaigned on in the previous iteration of the fund,” says Mr Francis.


Many small businesses in Wales have also benefited from the Covid-19 Wales Business Loan Scheme, launched by the Development Bank of Wales on 30 March. Within its first month the scheme approved loans worth more than £36 million in total, with an average loan size of £61,000, including more than 200 loans worth less than £25,000. Mr Francis says FSB had worked closely with the Development Bank to encourage it to launch exactly this sort of scheme.

FSB Wales continues to focus attention on businesses that still lack government support, while urging local authorities to release funds to support businesses when necessary. FSB is also making the case for the introduction of a Tourism Hibernation Scheme in Wales to help businesses that depend heavily on tourism. 

This could take the form of an extension to the Development Bank’s loan scheme. 

Northern Ireland

In Northern Ireland, too, FSB has been working to ensure that support provided to businesses in the region matches or exceeds that pledged by the Westminster Government. 

The Northern Ireland Executive has tried to make grants and loans available to small businesses as in other parts of the UK, but it took a different approach on business rates: on 17 March Finance Minister Conor Murphy announced a three-month business rates holiday for all businesses and a deferral of the April rates bill until June. 

Since then, following lobbying from FSB NI, the Minister brought forward a further comprehensive rates package, which ensured that all businesses in all sectors would not be charged rates until August – amounting to a third off their rates bill. With the exception of large supermarkets and off-licences, businesses in the retail, hospitality, leisure and childcare sectors received a 100 per cent rates discount for the year.


FSB Northern Ireland continues to press the Executive for further support to businesses not covered by other schemes. At the end of April it saw some success: an announcement that small businesses based in rental properties could apply for grant support. Then, in early May, Economy Minister Diane Dodds announced a £40 million hardship fund for micro-businesses and social enterprises not yet covered by existing schemes. 

Restarting the economy

Arguably it is the current phase of the recovery – the easing of lockdown and gradual reopening of businesses – that may prove most difficult for many small businesses, operationally and financially. Although the UK Government has published guidance designed to help businesses reopen, it cannot hope to answer innumerable questions that businesses of all kinds will have about how to keep staff and customers safe. Devolved administrations are also producing workplace guidance. 

FSB is seeking to help members understand the guidance that already exists and is lobbying for more information and resources. FSB Wales has suggested that the Welsh Government introduce a Social Distancing Grant Fund to support businesses struggling to adapt business premises in a way that would allow them to open while complying with social distancing guidelines. 

As the easing of lockdown continues, it will be vital that government support for small businesses is phased out, rather than stopped overnight, says FSB Head of Policy Sonali Parekh. “You can’t expect the same level of support during the recovery that you had during the crisis, but there needs to be a different kind of support.”

The furlough scheme will need to become more flexible as it is wound down, and FSB is also speaking to policymakers about other measures that might help to support economic recovery, such as changes to VAT. 

Ms Parekh says FSB has also brought to the Government’s attention the difficulties some small businesses are likely to face when trying to pay back loans taken out via the Government’s scheme. One possible solution would be to spread repayments over the longer term, as is the case for student loans. 


FSB is also researching the levels of debt that small businesses have taken on to survive – and the extent to which some have not wanted to take on more debt. Mr McTague says another strand of research considers how the crisis has changed the way businesses operate and may then enable the transformation of new ideas into new businesses. 

“We may see more new businesses being set up after this crisis – this may have been a time when people were able to take a step back and think about business ideas,” he says. “We 
need to incubate that, to help the whole economy grow again.”

For now, though, FSB continues to urge policymakers to keep supporting the small businesses that form the bedrock of the economy and will ultimately drive its recovery.  

Related topics