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Sat, 23 January 2021

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Businesses Say New Support Scheme Is A "Sticking Plaster" That Won't Sustain Them Through Lockdown

Businesses Say New Support Scheme Is A 'Sticking Plaster' That Won't Sustain Them Through Lockdown

Businesses have urged the Chancellor to go further with financial support

4 min read

Rishi Sunak is facing criticism over his latest business support package, with businesses calling for further action to help them survive tightened coronavirus restrictions.

It comes after the Chancellor announced a new £4.6bn support fund aimed at shoring up the balances of non-essential retail shops, pubs, restaurants and hairdressers forced to close under the latest national restrictions.

The top-up grant, capped at £9,000, is based on the rateable value of a business, with only the largest firms recieving the top-end of the payment.

Companies with a rateable value of £15,000 or under will only be entitled to a top-up grant of £4,000 with those with a rateable value of between £15,000 and £51,000 available to claim grants of £6,000.

Mr Sunak said the funds would help support businesses and jobs until Spring, adding the cash would "help sustain jobs, so workers can be ready to return when they are able to reopen".

The funding comes alongside other recent financial support offered to firms closed either because they were under stricter tiering measures or because they were deemed too risky to reopen, such as nightclubs.

Firms forced to close are still eligible for monthly £3,000 grants, while an additional £1,500 is provided fortnightly to those entertainment venues who have not yet been allowed to start trading again.

Mr Sunak also recently extended the furlough support scheme until the end of April, with the government paying 80% of furloughed staff's wages up to a maximum of £2,500.

But the top-up grants fall well short of the £25,000 grants offered to small business by the Chancellor during the first lockdown in early 2020, with many saying they have already spent the cash trying to keep their firms solvent or on ensuring their premises were compliant with social distancing rules when they were allowed to reopen.

And industry groups, including The Campaign for Real Ale, which represents pubs and bars, said while the grants were welcome they would not be enough to save the industry.

"It is clear now more than ever that the Government must introduce a new, long-term and sector-specific financial support package to help these buisnesses survive the coming months.

"While one-off grant support is welcome, it is nowhere near enough to cover the haemorrhaging costs for pubs and breweries that don't see any end in sight," they said in a statement.

"A new, dedicated and decent financial support package must reach our pubs and breweries quickly to save them from permanent closure and help hard-working licensees through this incredibly difficult time."

One cafe owner based in London said while the cash would provide some help, it was not suffient to provide them with long-term stability.

"Any money just now is obviously going to help, but this is nothing more than a sticking plaster. We aren't able to claim the full £9,000 and many small businesses like us will be in the same boat," they said.

"We were able to open for a bit but then Tier 4 hit and we were closed again and it's taking a major toll on my mental health to be honest.

"We've had other support from the government with reliefs and grants from when London went up a tier but it's hardly consistent."

Adam Marshall, chief of the British Chamber of Commerce, said the delay in announcing the measures had left firms wondering if they were going to get any support during the lockdown.

"This is a pattern that we have seen repeatedly whereby businesses find that their operations are going to be somehow further curtailed without having knowledge of the support that's going to be there to help them through that period of restriction and difficulty.

"It should be possible, I think, to announce both restrictions and support in tandem, because that in turn generates business confidence and means that phones aren't ringing off the hook with worried businesses wondering whether they'll be able to open and whether they'll be able to pay their people and their suppliers at the end of the month."

Meanwhile, Mr Sunak's has been warned his decision to tie the provision of the largest grants to those firms with rateable properties could push online businesses, tourism firms and other event companies into further financial difficulty.

Instead, those firms will have to apply for discretionary payments from local authorities who have been provided a further £594m from the package.

But wedding industry group, WhatAboutWeddings, tweeted the support provided to sectors not officially forced to close under the lockdown rules was "utterly insufficient".

"So many wedding businesses have been denied grants previously, because apparently, we're still open. The average recieved has been £1334 and that's utterly insufficient," they wrote.

"We're being hit time and time again and it's beyond painful."

Read the most recent article written by John Johnston - Coronavirus Infection Rates Could Have Seen A "Recent Uptick", A New Study Warns


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