So says thinktank the Institute for Public Policy Research (IPPR) in its latest report.
The 600,000 businesses at risk of collapse without more support together employ approximately 9m people, “whose jobs could be lost” said the left-of-centre thinktank.
Small businesses (which together are responsible for a large share of UK employment) are most at risk of bankruptcy. About 40 per cent of firms with fewer than 50 employees have less than three months of remaining cash reserves.
Overall, the number of companies with “dangerously low” cash buffers has risen sharply over the four months to the end of January, as national lockdowns slash trading, the IPPR said.
The chancellor should use the March 3 Budget to extend the furlough scheme, due to end in April, issue more grants, and take equity stakes in businesses in exchange for cash injections, creating what it calls a “Citizens’ Wealth Fund”.
“Millions of people’s jobs and livelihoods depend on the Chancellor stopping firms going broke just as the pandemic is coming under control, and ensuring that they have enough cash not just to limp through this crisis but to come roaring out of it when lockdown ends,” George Dibb of the IPPR told the Telegraph.
“By extending and improving the current support schemes, and by taking the new route of injecting cash into firms in return for a long-term stake in their future, the government can ensure that our best businesses survive and can leap back into action as our economy recovers from this long hibernation.”