As England moved into a third national lockdown with the tightest restrictions since last spring — and with similar curbs in place in Scotland, Wales, and Northern Ireland — UK Chancellor of the Exchequer Rishi Sunak announced Tuesday further government support for business.
Sunak said in a press statement that the government was making “a further cash injection to support businesses and jobs until the spring”.
The aid includes one-off top-up grants for retail, hospitality, and leisure businesses closed under the lockdown measures announced by UK Prime Minister Boris Johnson on Monday. The grants are worth:
- £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.
A £594 million discretionary fund is also being made available for local authorities and the devolved administrations to support other businesses that are not eligible for the grants but might be affected by the restrictions. Businesses should apply to their local authorities, the government said.
These new, one-off grants are in addition to existing business support, which includes grants worth up to £3,000 for closed businesses and up to £2,100 per month for businesses impacted by the pandemic once they reopen.
The Association of International Certified Professional Accountants and other organisations called for a longer-term support plan.
The Association’s chief executive–Management Accounting, Andrew Harding, said: “To build back better from the pandemic, we must focus on delivering both short-term actions and long-term proposals designed to invest in people, stimulate business innovation, and shift to a greener economy.”
Adam Marshall, director-general of the British Chambers of Commerce, described the government support package as “incremental”. He tweeted: “Ministers need to set out a clear support package for the whole of 2021 — not just until spring — to help businesses of all shapes and sizes survive this difficult and uncertain year.”
Kate Nicholls, chief executive of UKHospitality, a trade body representing businesses in the hospitality sector, including bars, hotels, nightclubs, and visitor attractions, called for “confirmation of extensions to the business rates holiday and of the 5% VAT rate”.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.
Video: UK offers new $6.2 billion to firms to ease lockdown
The UK offered a £4.6 billion ($6.2 billion) support package for businesses to soften an expected recession caused by a surge in COVID-19 cases.
Editor’s note: The following is a transcript of the accompanying video. ©2020 Thomson Reuters.
Britain has offered new support to businesses expected to be hit as the country enters a third national lockdown. The new measures total £4.6 billion — or about $6.2 billion.
Set out by finance minister Rishi Sunak Tuesday [5 January], they mean companies in retail, hospitality, and leisure can claim one-off grants worth just over £9,000, or about $12,000.
[Sunak said]: "It's important to remember that comes on top of the existing monthly grants of £3,000 that those businesses receive and the extension of furlough all the way through to April, you know, we remain committed to protecting jobs and supporting businesses."
Last year, Sunak announced emergency help for the UK economy worth around $380 billion.
It included a massive job protection scheme due to run to the end of April.
The country will likely need it, with JP Morgan analysts predicting a hefty 2.5% fall in output for the first three months of this year.
Britain's new lockdown was announced on Monday [4 January] by Prime Minister Boris Johnson. It means most people must work from home, and sees schools closed for almost all pupils. Hospitality venues and nonessential shops must stay shut.
UK-based airlines British Airways and easyJet are among the first to suffer. Both carriers said they were reviewing their plans in response to the lockdown. A reduction in flights seems almost certain, with most Britons now prevented from travelling abroad.