finance

Rishi Sunak announces new £4.6bn support package for business


Rishi Sunak has announced a £4.6bn fresh financial support package for struggling UK companies a day after the government imposed its toughest Covid-19 restrictions since last spring.

The chancellor said the Treasury would provide £4bn of one-off “top-up grants” for an estimated 600,000 retail, hospitality and leisure companies, which can each claim up to £9,000.

There will also be a new £594m discretionary fund made available for councils to support other businesses that are not eligible for those grants but are affected by the restrictions.

Yet business leaders are increasingly concerned that some support measures will be withdrawn in the spring as more people are vaccinated, leaving some industries in dire straits.

The British government has introduced a swath of unprecedented support measures since last March, including several major loan schemes and a “furlough” job support scheme — but the latter is set to be wound up at the end of April.

Business executives have questioned why Mr Sunak has not been more visible as the health situation has deteriorated, and said that support measures were falling far short of what was needed to save hundreds of thousands of companies before the spring.

Adam Marshall, head of the British Chambers of Commerce, said that the immediate cash for businesses was welcome, but was “not going to be enough to save some firms”.

He added: “We need to see a longer-term plan to support businesses well beyond spring and throughout 2021. Support must cover not just for those on the front line of retail or hospitality, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions.”

READ  Buffett calls for more accountability for corporate directors

Roger Barker, director of policy at the Institute of Directors, said the new money “will go some way to reassuring the worst-affected businesses” but that the chancellor “must remain wary of a spring cliff edge in business support as the furlough scheme and other support measures unwind”.

Other business groups have called for value added tax deferrals, help with business rates beyond the spring and direct support for supply chains to damaged industries such as aerospace and hospitality.

So far the UK government has committed £280bn towards support measures during the pandemic, ranging from business support schemes to extra funding for the NHS and for personal protective equipment. 

Officials said he grants announced on Tuesday would take the support offered during the current lockdown to almost £9bn, including the grants of £3,000 per month that were introduced in November. That figure does not include another £5bn to £10bn a month that ministers expect to keep spending on the furlough scheme.

The lockdown announced by UK prime minister Boris Johnson on Monday night will last at least seven weeks and will see schools, hospitality, leisure and non-essential retail businesses across England close. The general public has been urged to stay at home apart from for specific urgent tasks and exercise.

Ministers are poised to announce new restrictions on entry into England from abroad, with visitors having to prove they have had a negative pre-flight coronavirus PCR test taken less than 72 hours before departure.

READ  Income tax receipts in Scotland £550m lower than forecast



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.  Learn more