Chancellor Rishi Sunak offers £4.6bn lifeline for high streets but gaps remain unaccounted for
The payments will cost the Treasury £4.6 billion and are aimed to help support the high street as new lockdown measures announced on Monday take hold.
Chancellor Rishi Sunak also announced a further £594 million for local authorities and devolved administrations to support businesses not eligible for the grants.
However business groups have pointed out that significant swathes of the county's business community remain unaccounted for in this latest package of support.
A Treasury spokesperson told The Yorkshire Post that it would likely be March before further support measures are outlined in the Budget.
Mr 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.”
The payments will be based on the size of each store, pub, cafe or hotel tied into the business rates typically paid by each business. The smallest sites will be able to claim up to £4,000 and medium-sized ones £6,000.
However, the Chancellor stopped short of extending the business rates holiday, which ends in April, despite calls from retail and hospitality leaders for such a move.
Other noticeable absences being called for by business groups and unions include a VAT cut and improvements to sick pay or support for working parents.
Commenting on the support measures for business announced by the Chancellor, BCC Director General, Adam Marshall said: 'While this immediate cash flow support for business is welcome, itis not going to be enough to save many firms. We need to see a clear support package for the whole of 2021, not just another incremental intervention.
“The government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.
“Many smaller firms won’t qualify for the full headline amounts set out in the Chancellor’s statement, and will be left struggling to see how this new top-up grant will help them out of their cashflow problems.
“Support must be sufficient to cover not just those on the front line of retail, hospitality and leisure, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions.”
Federation of Small Businesses (FSB) National Chair Mike Cherry said:
"While this additional financial support will be a lifeline to 600,000 businesses and therefore has value, there is a need for a plan that matches the scale of the economic damage we are seeing.
"For many it just won't be enough for businesses who are already under the cosh and on the brink.
"These funds come after a disappointing festive period and are followed by a last minute lockdown and do not go far enough to match the scale of the crisis that small firms are facing.
"There remain too many groups who need more support to weather this storm such as the newly self-employed, those in supply chains and company directors. We continue to call on the government to create a Directors Income Support Scheme, mirroring the Self Employed Support Scheme, in the form of a taxable grant for directors of limited companies calculated at 80% of three months average monthly trading profits, paid out in a single instalment and capped at £7,500.
"We also need to see the government make clear its plans for more finance capabilities made available to those who have used their allocations through Bounce Bank Loans as well as extending the period before repayments begin.
"This lockdown is expected to last for some time, even when restrictions ease, many small firms will be unable to function at 100 per cent, if at all. Which is why the government should create a Spring Economy Plan to help firms get through to drive a vaccine-enabled recovery.
"After clawing their way through 2020, the start of the new year looks set to be an even worse one for many. Small businesses are the backbone of our economy, and it is absolutely vital we support them in every way possible until the crisis finally begins to ease.”
According to real estate specialists Altus Group, 401,690 non-essential shops, 64,537 pubs/restaurants, 20,703 personal care facilities and 7,051 gyms and leisure centres are now closed.
The new one-off grants come in addition to 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 already provided £1.1 billion of discretionary funding for local authorities, extended the furlough scheme until April and taxpayer-backed business loans until March.
A Treasury spokesperson said: “We’ve taken swift action throughout the pandemic to protect lives and livelihoods, and today’s cash injection will ensure we continue to support businesses and jobs through to the Spring.
“We’ve already extended the furlough scheme until April, providing certainty for businesses as they navigate the months ahead. And we’ll have a Budget in early March to take stock of our wider support, and set out the next stage in our economic response.”