£4.6 Billion to protect jobs and support businesses during new National Lockdown

@RISHISUNAK #PLANFORJOBS – £4.6 BILLION IN NEW LOCKDOWN GRANTS TO SUPPORT BUSINESSES AND PROTECT JOBS 

Chancellor announces one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through to the Spring.

£594 million discretionary fund also made available to support other impacted businesses, which comes in addition to £1.1 billion further discretionary grant funding for Local Authorities, Local Restriction Support Grants worth up to £3,000 a month and extension of furlough scheme.

This follows the Prime Minister’s announcement last night that these business will be closed until at least February half-term in order to help control the virus, and, together with the wide range of existing support, provides them with certainty through the Spring period.

The cash is provided on a per-property basis to support businesses through the latest restrictions, and is expected to benefit over 600,000 business properties, worth £4 billion in total across all nations of the UK.

Chancellor Rishi 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.”

A further £594 million is also being made available for Local Authorities and the Devolved Administrations to support other businesses not eligible for the grants, that might be affected by the restrictions. Businesses should apply to their Local Authorities.

The new one-off grants come in addition to billions of existing business support, including grants worth up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen.

The government has also provided 100% business rates relief for retail, hospitality and leisure businesses, £1.1 billion existing discretionary funding for Local Authorities, the furlough scheme now extended to April and 100% government backed loans, extended until March.

The one-off top-ups will be granted to closed businesses as follows:

• £4k for businesses with a rateable value of £15k or under
• £6k for businesses with a rateable value between £15k and £51k
• £9k for businesses with a rateable value of over £51k

Business support is a devolved policy and therefore the responsibility of the devolved administrations, which will receive additional funding as a result of these announcements in the usual manner: 

• The Scottish Government will receive £375m
• The Welsh Government will receive £227m
• The Northern Ireland Executive will receive £127m

This is on top of the increased funding which has already been guaranteed by the UK Government, to continue to provide the devolved administrations the certainty they need to plan for their COVID-19 response in the months ahead.

Small businesses in the devolved administrations should also be able to benefit from other UK-wide measures in the Government’s unprecedented package of support for business, including the various business lending schemes (where the repayment terms were made easier as part of the Winter Economy Plan), and the extension of the Self Employment Income Support Scheme.

Sector Response to the extra business support during the third lockdown 

Neil Carberry, Chief Executive of the Recruitment and Employment Confederation, said:

“Businesses know that economic recovery and beating the virus are not in opposition, and because of that they can understand the need for a new lockdown, even if it is not welcome. But this decision has underlined the need for speed in the vaccine programme. That’s priority number one. We have already seen how agency staff in hospitals and care homes fell through the cracks when it came to the provision of PPE. The same must not be allowed to happen for the vaccine. Frontline workers need to be protected,  no matter what type of contract they’re on.

“Businesses go into this lockdown with cashflows under extreme pressure. Financial support such as the furlough scheme has helped a lot. But more opportunities to protect jobs must be seized. Support on VAT, cutting taxes like employers National Insurance contributions and reducing business rates will help struggling businesses retain staff. And the government must focus support not just on the businesses which need to close, but also the businesses that supply them who will be badly impacted. That includes recruiters who have been instrumental in helping businesses back on their feet quickly after the last lockdown.”

Rain Newton-Smith, CBI Chief Economist, said:  

“The Chancellor has once again moved swiftly to support businesses as circumstances change. It is sorely needed.

“More direct grants will provide some relief to eligible companies’ cashflow.

“Yet with businesses facing a third lockdown, there are other steps that can help provide a bridge to the all-important economic recovery, particularly those affected through supply chains.

“For some, demand has once again evaporated overnight, and in northern England some firms have been labouring under stop-start orders for months already.

“Therefore extending the job retention scheme to end of the second quarter would provide firms with a clear line of sight, aiding planning and investment. 

“And removing the business rate relief cliff edge in April will provide much-needed breathing space, as will re-examining the case for VAT deferrals.

“With the vaccine rollout now underway, and increasing mass rapid testing, there really is a brighter future within reach. Maintaining steadfast support for firms during this painful period will help ensure the recovery is delayed for as short a time as possible.”