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Dear Mr Sunak Letter from Cornwall and the Isles of Scilly Leadership

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Dear Mr Sunak Letter from Cornwall and the Isles of Scilly Leadership Information Classification: CONTROLLED The Rt Hon Rishi Sunak MP Chancellor of the Exchequer Via email: [email protected] 8 April 2020 Dear Mr Sunak Letter from Cornwall and the Isles of Scilly Leadership Board regarding the UK government response to COVID19 We warmly welcome the quick and comprehensive package of support that the UK government has put in place to support the economy across the UK at this difficult time, and we would like to thank you personally for the strong leadership you have shown in this respect. At a local level we are in direct contact with the businesses and individuals that are accessing these support measures, and the feedback that they are giving us has enabled us to identify some gaps and unintended consequences that need to be addressed urgently in order to ensure that our local economy will be able to rebound quickly once we have steered clear of the public health crisis that we currently find ourselves in. In order to ensure that our local businesses and communities can remain viable, to support businesses be to agile and responsive to opportunities and ultimately to ensure that we can protect jobs and prosperity long term, we have the following asks: • Furloughed workers. More flexibility is needed in relation to two key aspects. Firstly, there is a lack of flexibility for employers to bring back furloughed staff on a part time or short term basis to fulfil orders or to address a specific piece of work such as opening up closed down holiday accommodation for the use of key workers. This is detrimental to small businesses, including in the food processing sector that have to choose between furloughing workers for 3 weeks at a time or keeping staff on while production has slowed. This lack of flexibility for the employer is likely to make it more difficult for our businesses to adapt their businesses during this difficult period i.e. respond to new orders and it will make it harder for them to respond to the recovery phase where the lock-down restrictions are likely to be lifted gradually. Amending the Furlough scheme to allow businesses to put staff on half time working (and to pay them 50% of their salaries) and then allow them to access the furlough scheme to top this up by 30% to the current 80% offered would give a lifeline to processors with production lines that need full staff levels to operate them but need to reduce the number of days of operation. This is of particular importance to local abattoirs. Secondly, while it is positive that employees who have been furloughed are not prevented from taking up other work for example a seasonal agricultural job, then there is no mechanism to Cornwall Council | Konsel Kernow County Hall, Treyew Road, Truro, Cornwall TR1 3AY E: [email protected] | T: 0300 1234 100 www.cornwall.gov.uk Information Classification: CONTROLLED encourage furloughed workers to temporarily be redeployed to take up work in sectors that are experiencing staff shortages such as agricultural, delivery drivers or supermarkets. • Seasonal workers. In Cornwall and the Isles of Scilly tourism, agriculture and food processing are important sectors that operate with a high degree of seasonal workers. Many of these seasonal workers would be taken on during April and May and are therefore currently excluded from the furloughed scheme as they were not in employment when the scheme was announced. We would strongly encourage the government to open up the furloughing scheme for those workers that were in line to be in employed seasonally during April and May, especially where these workers are return employees that can demonstrate previous seasonal work with the same employer in previous years. In addition, the current pilot phase of the SAWS scheme expires at the end of December 2020 and only currently includes provision for up to 10,000 workers. Industry estimates put the actual figure required at closer to 70,000 and as many employers are beginning to secure their labour for the 2020/21 winter season in the coming months the lack of certainty over the future of the SAWS scheme when added to concerns over the Covid 19 outbreak is making it impossible to secure the necessary labour. Therefore, urgently extending the SAWS pilot until the end of 2021, increasing the number of workers allowed to 70,000 and extending its scope to cover non-food crops (very important to the economy of Cornwall and IoS and a significant contributor to the Treasury via VAT payments) is required. Growers are currently faced with investing in crops to be planted over the April to October period with no certainty that labour will be available to harvest them. • People falling through gap between self-employed and employed. We are getting reports of people not being able to access support because they do not have 3 years of tax returns/record of employment to claim 80% of salary. • Isles of Scilly tourism economy. A key group within the tourism sector that appear to be falling through the gaps are those earning their income through Furnished Holiday lets. This is in particular a significant issue on the Isles of Scilly where the April-September income from holiday lets is a key component of the economy. This group is not able to access support under the Self- Employed scheme. We are asking Treasury to urgently look into how to most appropriately put in place support for this group. • Coronavirus Large Business Interruption Loan Scheme. This new scheme aimed at business with a turn-over between £45 – 500 million is very welcome and we know that some of the medium sized businesses in Cornwall and Isles of Scilly are seeking to access this facility as soon as possible. While we understand that the government is working with banks through the British Business Bank to get this scheme up and running as soon as possible, we cannot stress enough the urgency around making this available. For an economy like the CIoS it is a strategic aim to retain and increase the number of medium sized employers in an economy dominated by small and micro businesses and we cannot afford to see any of our medium sized businesses fail due to the current COVID19 crisis. Information Classification: CONTROLLED • Loan repayment holidays for businesses rather than new debt. The Coronavirus Business Interruption Loan Scheme is a useful support mechanism, but it does result in the businesses accessing it having to take on more debt and the timescales involved in accessing it are significant. Whilst this may be appropriate for some business’s others may not be willing/able to service this extra debt. Therefore, an alternative option would be to encourage the banks to offer loan repayment holidays (similar to the mortgage holidays that re being offered to homeowners) as an alternative with immediate effect (suggested duration 3 to 6 months). This would deliver an immediate benefit to aid cashflow and require very little administration to deliver. It would not require any business to take on additional debt and when things improve they can either increase their repayments to cover the holiday period or extend the duration of their loan by 3 to 6 months. • Access to grants of tenants of Innovation centres and other shared workspaces. Cornwall’s three Innovation Centres are rated as a single hereditament and benefit from charitable rate relief with this benefit passed onto the tenants. Whilst tenants do not pay business rates the cost of renting space in the Innovation Centres is comparable to if not slightly higher than the cost of renting standard commercial office accommodation once all service charges and management fees are taken into account. As the Innovation tenants do not pay business rates, tenants who might otherwise qualify for support are not able to access small business grant funding. The disruption caused by Covid-19 combined with a lack of access to grants is already impacting on businesses located within the Innovation Centres which employ approx. 850FTEs and represent one of Cornwall’s most dynamic and innovative business communities. The same issue is true for new businesses formed as part of Falmouth Universities Launchpad Programme, where there are 17 incorporated businesses operating in space managed by the university. Businesses located in Par Market have also reported the same issue. • New businesses accessing support. Various of the support measures put in place will look to a business’ previous years’ financial books to determine eligibility. This leaves newly started businesses in a difficult place where they miss out on support because they cannot demonstrate previous years financial records. We urge the government to show as much flexibility as possible in this respect so that newly started businesses are able to access support. • Promotion of local food chains. Government can play a huge role in terms of the communication to the general public and in this respect we want to see government promote the role of local food shops to the public (rather than the current emphasis on only promoting the major retailers) and equal support mechanisms into local food supply as it does to the major retailers. National & global food supply disruptions are likely throughout the next 12 months and our local supply chains will be critical. Information Classification: CONTROLLED Yours sincerely Julian German Robert Francis Chair of the Cornwall and Isles of Scilly Chair of the Council of the Isles of Scilly Leadership Board Leader of Cornwall Council Cc The Rt Hon Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government - [email protected] The Rt Hon Alok Sharma MP, Secretary of State for Business Energy and Industrial Strategy - [email protected] .
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