A third of UK economy has ‘SHUT DOWN’ because of coronavirus and another third is in ‘difficulties’


A third of the UK economy has ‘shut down’ because of the coronavirus pandemic, MPs were warned today.    

Adam Marshall, director general of the British Chambers of Commerce, made the astonishing revelation as pressure increased on Boris Johnson to plot a way out of the crisis.

Mr Marshall warned that another third of businesses were functioning ‘with some difficulty’.

Retail, hospitality, catering, leisure and manufacturers were among those worst affected he said as he appeared remotely in front of the Business, Energy, and Industrial Strategy committee this morning.

It came as official figures showed that two-thirds of UK businesses have applied for Government help paying wage bills for furloughed staff, but less than a fifth have received support so far. 

Mr Marshall said: ‘We’ve seen significant impact right across the economy, right across the UK. 

Adam Marshall, director general of the British Chambers of Commerce, made the astonishing revelation as pressure increased on Boris Johnson to plot a way out of the crisis

Retail, hospitality, catering, leisure and manufacturers were among those worst affected he said as he appeared remotely in front of the Business, Energy, and Industrial Strategy committee this morning

Retail, hospitality, catering, leisure and manufacturers were among those worst affected he said as he appeared remotely in front of the Business, Energy, and Industrial Strategy committee this morning

Boris Johnson is set to signal lockdown will stay until June today as he gathers Cabinet to thrash out an 'exit strategy'

Boris Johnson is set to signal lockdown will stay until June today as he gathers Cabinet to thrash out an ‘exit strategy’ 

‘About a third of the economy is functioning as normal, a third is functioning with some difficulty and about a third has shut down due to the lockdown.

‘Our data is showing that retail, hospitality, catering, leisure and manufacturers have had some of the biggest impacts to date.

‘We are also seeing a big impact in international trade. We have seen volumes drop in some of our trade indicators of around 25 per cent over the past six weeks.’

The Office for National Statistics (ONS) said the Government’s coronavirus job retention scheme was the most popular support programme, with 66 per cent of firms surveyed having applied.

But the data from 5,158 firms revealed that just  19 per cent of firms that have applied have received help since it went live on April 20.

More than half – 56 per cent – of firms have also applied for the VAT deferral scheme, although just 42 per cent have received the support. 

Boris Johnson is set to signal lockdown will stay until June today as he gathers Cabinet to thrash out an ‘exit strategy’ – and then fronts a daily coronavirus briefing for the first time since falling ill.

The Prime Minister is expected to dash hopes of an imminent end to the draconian curbs crippling the economy, stressing that allowing the killer disease to run rampant again would do even worse damage.

B&Q has today reopened all of its 288 UK stores and have 'strict social distancing measures' in place. (Stock image)

B&Q has today reopened all of its 288 UK stores and have ‘strict social distancing measures’ in place. (Stock image)

Mr Johnson will put the ‘R’ number – the reproduction rate of the virus – at the heart of the battle, saying he will not take action that lets it rise above one, meaning it is growing.

Government sources have indicated he will also defy calls to treat the public like ‘grown ups’ by spelling out ways in which the lockdown might be eased, saying it is ‘too early’.

Helen Dickinson, chief executive of the British Retail Consortium, told the committee that 69 per cent of non-food retailers have been ‘significantly’ impacted by the virus.

She added: ‘There is no way that anybody is expecting that demand will revert to what it was before – there will be a slow gearing back up.

‘What implementing social distancing will mean is that normal capacity to serve customers will be restricted and, certainly from a public perspective, I have no doubt that people will be very cautious about how they shop, for safety reasons and because of pressure on money in their pockets.

‘It’s important not to turn off the tap, so the Government has to be careful about how financial support schemes taper off.’ 

B&Q has today reopened all of its UK branches as the country tries to edge out of lockdown.

The DIY store confirmed its 288 stores were now open to the public after the business was forced to close on March 25.

 

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