Sunak unveils £4.6b in business grants

UK: Following news that England is to enter a national lockdown from 12am Wednesday 6th January, chancellor Rishi Sunak has announced a one-off grant up to £9000 for businesses in hospitality, leisure and retail.

Prime minister Boris Johnson has called for businesses to close until at least the middle of February in order to control the transmission of Covid-19.

As a result, Sunak has announced financial support for businesses through the latest restrictions, with cash being provided on a per-property basis. It is expected to benefit over 600,000 business properties costing £4 billion in total across all nations of the UK.

The grants are in addition to the £1.1 billion in discretionary funding for local authorities, local restriction support grants worth up to £3000, and the extension of the furlough scheme until the end of April 2021.

Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further. Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring. This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

The grants will be made available to closed businesses as follows:

• £4,000 for businesses with a rateable value of £15,000 or under

• £6,000 for businesses with a rateable value between £15,000 and £51,000

• £9,000 for businesses with a rateable value of over £51,000

UKHospitality chief executive, Kate Nicholls, commented: “The chancellor has rightly recognised the costs imposed on hospitality businesses by enforced closures and the need for additional support. It is also encouraging that the discretionary grants address the suffering in the supply chains upon which our sector is reliant.

“However, while this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector. To address the inevitable and existential challenges that hospitality faces, we need confirmation of extensions to the business rates holiday and of the five per cent VAT rate.”

Christian Mole, head of hospitality and leisure, UK and Ireland, EY, said: “Additional support for the hospitality and leisure sector is welcome but more help than what has been announced so far may be needed to fully support businesses through the new national lockdown. The latest grants will only go a small way towards compensating for the loss of trading already incurred over the critical Christmas and New Year period in former Tier Three and Four areas, particularly for smaller businesses. It is surprising that there does not appear to be some differentiation in grant levels between those businesses in areas which were able to open through to Christmas and those which were not.”

Jane Longhurst, chief executive of the mia, said: “While today’s package of financial support from the chancellor has been announced with the expressed intention of sustaining jobs, we once again need clarification on whether the business meetings and events sector is absorbed within the government’s definition of ‘retail, hospitality and leisure’ or is the sector once again being left to navigate its way through the discretionary fund process.

“Having demonstrated our concerns to government throughout the course of the pandemic, including the harrowing impact upon redundancies, business cancellations and future event bookings, we are urging government to provide a specific package of support for the sector and extend its Job Retention Scheme to the end of Q3. Only this will provide employers with a viable means of retaining their workforce and preventing a surge in unemployment.”

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