Sunak unveils £1 billion fund for Covid-hit firms
Rishi Sunak: ‘generous’
The chancellor has set out £1 billion of measures to help bars, restaurants, and theatres cope with the latest Covid crisis, with Nicola Sturgeon due to announce what action she will take.
Rishi Sunak said grants of up to £6,000 per premises will be provided and the taxpayer will also cover the cost of statutory sick pay for Covid-related absences for companies with fewer than 250 employees. An extra £30m will be provided to help theatres and museums.
The devolved administrations will receive £154 million of funding through the Barnett formula as part of the support announced, with about £80m for the Scottish Government, £50m for the Welsh Government and £25m for the Northern Ireland Executive.
Some will consider the package to be less than sufficient in light of soaring costs and losses caused by a wave of cancellations.
The Chancellor said the new support was “generous” and recognised the situation many hospitality and leisure businesses faced in the run-up to Christmas.
“I will always respond proportionately and appropriately to the situation that we face. People can have confidence in that,” he said.
He would not be drawn on whether further help would come should further restrictions be announced, as ministers come under pressure to tackle the rapid rise of the Omicron variant.
He said: “It’s important to remember we have support already in place that lasts all the way to next spring.
“So, for example, a reduced rate of VAT for the hospitality and tourism sectors, and this year they are benefiting from a 75% discount on their business rates bill. Those types of things last all the way to next March to support the industry.”
Shevaun Haviland, director general of the British Chambers of Commerce, said: “These measures will provide some welcome respite to many of those businesses who have been hit hardest by the latest Covid measures.
“The Chancellor and his team have engaged with us in talks over the past week, considered the experiences of Chamber business communities and the proposals we put to them. “
Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “These positive measures will help alleviate the intense pressures that small firms are currently under, and hopefully arrest a significant decline in confidence over this year.”
The funding may indicated that more restrictions are due, even though the Prime Minister has so far resisted the advice of medical experts to shut down parts of the economy.
Rain Newton-Smith, CBI chief economist, said: “The Chancellor has provided welcome breathing space to boost confidence and provide support for hospitality and leisure businesses to keep their doors open through tough disruption to their crucial winter trading.
“The latest targeted package offers a fair variety of support to help keep businesses open, with new central grants, flexibility on time to pay and sick pay support for SMEs. All this and more will help keep the economy open as we learn to live with the virus.”
Pat McFadden, Labour’s Shadow Chief Secretary to the Treasury, described it as a “holding package from a Government caught in a holding position”.
He said the Prime Minister is a “prisoner of divisions inside his party and within the Cabinet” about whether any further measures are needed and whether they will get past Tory backbenchers.
“That is not the way that crucial public health decisions should be taken,” he said.
“Labour has been calling for an economic support plan for businesses affected by a wave of pre-Christmas cancellations. Support is welcome to see but we will be going through the details of this announcement to see which business and workers are included and excluded.
“Business support should have been announced when the Plan B changes were voted on last week but it has only happened after the Chancellor was dragged back from California to focus on the plight facing businesses and workers here in the UK.
“The real question after yesterday’s indecisive Cabinet meeting is what will happen next, when will the country be informed of that, and will support for businesses and workers be placed alongside any further public health measures that might be announced.”
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