Watch: Rishi Sunak outlines new financial support measures
Chancellor Rishi Sunak has announced £4bn ($5.4bn) in new grants to support retail, hospitality and leisure firms, and another £594m for struggling firms in other sectors.
The chancellor said firms forced to close would receive one-off grants worth up to £9,000 per site, in a move welcomed by business leaders. Other hard-hit firms will be able to apply for a funding pot from local authorities.
The package overall is expected to support more than 600,000 firms, and is provided on a per-property basis.
It comes after England, Scotland and Northern Ireland were placed in full-scale lockdowns to curb the coronavirus once again, with Wales already under nationwide stay-at-home restrictions.
“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,” said the chancellor.
“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.”
Vast swathes of the UK economy now face at least seven weeks of severely limited trade, with many firms forced to shut up shop altogether. Cabinet minister Michael Gove said on Tuesday the restrictions could last into March.
Firms had called for more support and welcomed the extra cash. Companies warned they face hardship and said job losses could rise significantly in certain sectors as businesses adapt to the “body blow” of fresh restrictions.
“This new grant package is welcome, and will go some way to reassuring the worst affected businesses,” said Roger Barker, director of policy at the Institute of Directors.
He said firms would particularly welcome the grants to firms not just in directly shut-down sectors, helping to “reach those who haven’t been able to access other support.” The local authority grant pots should be topped up if needed, he added.
Rajesh Agrawal, deputy London mayor responsible for business, called for more help beyond March however to stop job losses and business closures, including an extended business holiday. There had been speculation Sunak would extend the furlough scheme further and announce more funding for the self-employed.
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Green MP Caroline Lucas noted many self-employed workers and small company directors continued to fall through the cracks in support, calling their exclusion “unforgivable.”
Adam Marshall, director-general of the British Chambers of Commerce, said shortly before the announcement: “The lockdowns announced in England and Scotland today are a body blow to our business communities, hard on the heels of lost trade during the festive season and uncertainty linked to the end of the Brexit transition period.”
“Tens of thousands of firms are already in a precarious position, and now face a period of further hardship and difficulty.”
Helen Dickinson, chief executive of the British Retail Consortium, said retailers were set to lose £2bn in sales a week from closures, and backed calls for business rate relief beyond April.
The grants for closed firms will be allocated based on rateable values of the properties they operate in. Those under £15,000 will receive £4,000 per site, those between £15,000 and £51,000 will receive £6,000, and sites with a rateable value above £51,000 will receive £9,000.
The package will see the Scottish government handed £375m, the Welsh government £227m and the Northern Ireland executive £127m to distribute, with business policy devolved.