Labour Analysis Shows Hospitality Businesses Will Get Less Financial Support Than In The First Lockdown
Labour say five out of six hospitality businesses will not be eligible for the maximum grants available to help them through lockdown (PA)
Five out of six hospitality businesses will miss out on the largest £9,000 grants to help them get thought the latest lockdown, analysis by the Labour party suggests.
They are calling for the new business secretary Kwasi Kwarteng to deal with the cash crisis facing the industry, after accusing his predecessor Alok Sharma of being “asleep at the wheel”.
The shadow business minister Lucy Powell will use a petitions debate in Parliament today to highlight new analysis claiming hospitality firms will receive much less in cash terms than the grants they received from the Treasury in the first lockdown.
Labour’s investigation of data from the Valuations Agency Office shows just 14% of firms will receive the one-off £9,000 grant announced last week, while 22% will get £6,000 and 63% set to get £4,000.
Despite months of low or no trade, the party says closed small businesses will only get 40% of the money available last March, and for those with a rateable value between £15,000 and £51,000 it is worth less than a quarter.
Last week the Chancellor Rishi Sunak announced one-off top up grants would be available for the retail, hospitality and leisure industry as part of a £4.6billion package to help businesses through to the spring.
Ms Powell told PoliticsHome: “The government is failing businesses in hospitality and on the high street, with the vast majority receiving less support through this one-off grant than they did in March, despite their cashflow being much more precarious.
“Alok Sharma was asleep at the wheel, with many companies heading for a crash, threatening jobs and livelihoods.
“The new business secretary must wake up to the crisis businesses face. Ensuring that there’s a proper framework in place to protect jobs and businesses from going bust must be at the top of his in tray.”
She will also highlight statistics from the latest Business Impact of Coronavirus survey, published last week, which underlines the cash crisis facing firms on the high street.
The accommodation and food services sector has the highest proportion of businesses with no cash reserves, while nearly 1 in 6 have debt repayments more than 100% of turnover.
And many small businesses in the supply chain and associated sectors like weddings and events will not receive a penny from these grants, and will have to wait to see whether they are eligible for discretionary funding.
In response a government spokesperson said: “We recognise the extremely challenging circumstances facing the hospitality sector, however these restrictions are necessary to protect the NHS and save lives.
“We have put in place one of the most comprehensive and generous packages of business support in the world, worth £280billion. This includes the extended furlough scheme, business rates holidays, various loan schemes and VAT deferral.
“Hospitality businesses can continue to access our grant schemes – including the latest, worth up to £9,000 per business, which is in addition to the £3,000 a month businesses required to close receive.”