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BAME businesses disproportionately hit by coronavirus, report reveals


Black, Asian and minority ethnic (BAME) businesses have been disproportionately hit by coronavirus and risk of financial ruin - which could cost the UK economy billions of pounds, a report has revealed.

BAME businesses disproportionately hit by coronavirus, report reveals


"Lives and livelihoods are at risk and we want our voices to be heard."
Moslek Uddin, CEO of UK Curry Connect



BAME businesses have been disproportionately hit by coronavirus and risk of financial ruin - which could cost the UK economy billions of pounds, a report has revealed.

Black, Asian and minority ethnic (BAME) communities are at greater risk of dying if they contract the virus – but face greater exposure because of the businesses they tend to run.

And nearly two-thirds said they had been unable to access government funding, according to research commissioned by a cross-party group of MPs.

Diana Chrouch, special advisor to the All-Party Parliamentary Group (APPG) for BAME business owners, said: “The impact to the economy would be astronomical if a significant number of BAME-run businesses had to close. It could easily lead to a loss of billions of pounds.”

There are reported to be 250,000 firms led by ethnic minority entrepreneurs, contributing around £25 billion a year to the economy.

Many provided frontline services during lockdown, including pharmacies, convenience stores and takeaways and general support in their community.

Overlooked

Yet the report found many felt overlooked and unable to access state-backed loans and grants in the early days of the coronavirus pandemic. 

Chrouch, who is also the chair of national BAME policy for the Federation of Small Businesses (FSB), said: “Many industries have been affected by coronavirus, but this report shows it has been particularly hard on ethnic minority businesses as a whole.

“It would greatly benefit the UK economy if such enterprises were given the resources and support needed to survive the pandemic and scale up.”

UK Curry Connect (UKCC), an organisation set up to raise awareness of skills shortages in the Asian catering industry, collated information from members as part of a national public consultation.

Moslek Uddin, CEO of UKCC and active APPG member, based in Weston, said: “Our industry has faced many challenges and this pandemic could be the nail in the coffin.

“Lives and livelihoods are at risk and we want our voices to be heard. We need greater representation in government.”

UKCC gives the industry a voice and lobbies support from the government. It  helps develop skills, networks and young talent in the sector

Inequality

The consultation, which took place shortly after Black Lives Matter demonstrations begun in the UK, revealed long-standing structural inequalities – heightened by the pandemic.

Entrepreneurs from ethnic minorities are less likely to have access to bank financing, venture capital or Angel Investment.

A history of mistrust and a lack of support was also reported from some BAME-led enterprises.

Chrouch, whose own parents were part of the Windrush generation of immigrants from the Caribbean said: “Some people said they were wary of asking for help because of perceived discrimination and legacy of a ‘hostile environment’ immigration policy.”

The policy, which was part of a strategy to reduce illegal immigrants, was blamed for the Windrush scandal - where many were forcibly deported, detained and denied legal rights.

Practical issues prevented other BAME business owners from claiming government support, such as language and IT barriers.

Desperate measures

Some cash-strapped owners have resorted to dipping into savings and taking out pay-day loans.

There are calls to make funding more accessible and provide tailored business support for BAME business owners.

Health risks

People of BAME heritage are up to twice as likely to die of COVID or suffer serious health complications.

They also face greater exposure – with a tendency to work in sectors such as hospitality and retail, which involve long hours outside the home and in customer-facing roles.

But there were concerns over the lack of government health and safety guidance and PPE provision.

Mental health

Perhaps unsurprisingly, many BAME business owners’ reported anxieties around the current crisis.

Chrouch said: “I speak to people who have poured their heart, resources and energy into their businesses.Through no fault of their own, they have been hit hard and are left feeling helpless and devastated.”

Calls for action

There are calls for greater representation and engagement by policy makers with BAME business owners in order to understand the issues they face and find better solutions.

Chrouch said: “We need representation at the highest level of government, along with better access to funding and business support. A one-size-fits-all approach just doesn’t work.”

         

Case Studies

Ershad Ali, restaurant director at The Curry Garden in Orchard Street, Weston, said business has been badly hit.

The restaurant has been serving loyal customers for over 40 years ago, since it was first set up Mr Ali’s late father, Junab.

Mr Ali, 37, who studied business and marketing at University of South Wales in Newport, had seen custom triple in recent years due to changes in layout and menu updates. 

But lockdown, a 10pm curfew and social distancing has led to a 40 per cent loss in turnover.

Curfew

Mr Ali said: “The 10pm closure is leading to a loss of custom for us, especially as Indian food tends to be eaten as a late meal, and I can see no scientific explanation for implementing it.

“We have halved our seating capacity due to social distancing. We can’t have tables of more than six people and it’s hard to plan for future events, such as Christmas parties.

“We have a lot of cleaning, compliance and precautions to put in place and the extra workload – for reduced income – is incredibly stressful.”

He said many bookings had been cancelled in recent months and he lost thousands of pounds worth of stock with the announcement of lockdown.

‘Want to crumple’

He said he has received a small business grant, furloughed staff and had to let some employees go. But has had to dip into his own savings to cover costs such as rent.

The dad-of-two said: “I’m worried that I can’t guarantee jobs for our staff, who have been with us for around 10 years and are very good at their work.

“I’m also worried about proving for my family and we’ve already had to make cuts at home. I’m trying to stay positive, for the sake of my family, staff and business, but when I’m alone I want to crumple.

“I’m often awake until the early hours of the morning, my eating patterns are all over the place and there have been moments when I have wanted to pack it in.”

But he said he has had encouraging feedback from loyal customers and wants his father’s legacy to live on.

He is calling for all industries to work together and for the government to offer continued support if further lockdowns are put in place.

He said: “I understand that people’s health has to come first and there has been government support. But business could be hit even harder if there’s another lockdown and we need to think long-term.”

 

Mahboob Rahman is a manager at Table Eight in Wedmore, Somerset, which has seen around a 40 percent drop in income. He has also had to let two staff members go.

The venue now just serves takeaways and is struggling to make ends meet – as costs continue to rise.

Mr Rahman said: “People don’t want to go out much, as I think they are scared. I’ve had to let staff go and reduce hours for others, which was a hard thing to do.  

“But our bills are going up, while are takings are very low. The restaurant may be closed, but we still have to pay rent.

“I’m worried about the next six months and don’t know how we will recover. The uncertainty and lack of clear guidance makes it difficult to plan ahead.”

The venue had to close after a staff member tested positive for COVID, which also affected takings.

Mr Rahman has signed a lease for another restaurant in Princess Road, Wells, but does not know how he will be able to afford it if business does not improve.

The dad-of-two said: “I worry about providing for my family and paying my staff, so am now scared to expand.”

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