27 September 2020 Business

Industry presses case for disaster relief

There will be devastation, with thousands of insolvencies and rising unemployment, unless the government steps in with targeted assistance to help printers that are struggling.

The printing industry has likened itself to catering and hospitality in an appeal to the Government and Chancellor Rishi Sunak for “a means tested ‘disaster relief style grant” to avoid closures and redundancies caused by the imposition of Rule of Six restrictions.

The Graphic and Print Media Alliance, the umbrella organisation representing the 15 trade associations in print, has issued a statement describing the situation that many print businesses find themselves in. Without assistance, around 3,000 companies in the sector will need to declare insolvency by the end of the year and a further 3,000 will only be capable of staying in business for a further six months. And, it adds, just 10% are eligible to claim government loans to remain solvent.

The problem is, it argues, that printers, like hospitality, depend on a steady flow of small orders and that orders not placed are orders lost, rather than orders delayed like the purchase of a new car, washing machine, or consumer electronics, where catch up purchasers are likely once the crisis passes.

“The UK graphics and print media industry is facing its greatest challenge. In particular, the commercial and retail print sectors are facing a breakdown of supply chain integrity and the loss of thousands of businesses if they do not receive targeted assistance,” says a joint statement from BPIF chief executive Charles Jarrold, Picon CEO Bettine Pellant, IPIA chairman Graeme Smith and BAPC chairman Brendan Perring.

However, the statement was issued on the same day that the Chancellor was telling the House of Commons that government loan repayments would be extended, that the Job Retention Scheme would be replaced by the Job Support Scheme, although nothing aimed at specific industries. Its aim is to ensure that viable jobs are not lost as the furlough scheme comes to an end.

Despite being welcomed at first sight, the scheme is causing some hesitation. Nigel Toplis, managing director of Bardon Group and owner of the KallKwik franchise group, says: “The statement today by the Chancellor was in all honesty a bit of a mixed bag.
 
The thrust of his announcement was about ‘holding the tiller firmly’ – trying to maintain an economic status quo – protecting employment. To this end there is certainly some merit in the Jobs Support Scheme – though I question why businesses would want to make a greater financial contribution.
 
If a business can afford to pay someone 50% of their salary and they work 50% of the time why would businesses make a further contribution so that the employee could earn 78%?
 
This is not about feelings, or sympathy, or doing something for employees – this is about simple economics. So while it sounds great that employees can earn 78% of their salary for doing 50% of the working day the burden on businesses is increased.”

He welcomes the retention of 5% for the hospitality sector, fearing that many may not recover in any case. An extension across the economy would have been welcome, he says.

Both Toplis and Jarrold have welcomed the ability to extend emergency loans over ten years. “There is some good stuff, but really he has not gone far enough,” says Toplis.

Which then reinforces the need for interventions to prevent the mass closure of print businesses in the next six months. In the joint letter, the GPMA calls for a ‘disaster relief’ style grant for those business able to demonstrate the scale of damage they face, comparing performance this year with 2019.

“We would appreciate an understanding from your Departments of the specific challenges facing businesses where demand for their products is of the ‘little and often’ type, and which are therefore unlikely to enjoy a post Covid business bounce,” they say.

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Print's representative bodies have united in a plee to government to find some measure of emergency help for the print industry, or risk the closure of thousands of businesses by the end of the year.

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