The Treasury has today (5 December) announced a funding pot of £4.6 billion to provide grants of ‘up to’ £9,000 per shuttered premises. Whilst this immediate cash flow support for business announced today is welcome, it is simply not generous enough to save many firms and the financial support on offer needs to be stepped up in line with the devastating restrictions being placed on them.
Compared to the grant schemes last Spring, the new money, which will be distributed through local authorities, seems much too low – the largest businesses will get less than the smallest received in April 2020.
In the order of £300bn has already been spent helping firms to survive this unprecedented crisis and to save jobs.
These businesses must not be allowed to fail now, when the vaccine rollout provides light at the end of this long tunnel. It makes little sense for the Government to be tight-fisted with support when businesses have depleted cash reserves and taken on much more debt during last year making them more vulnerable to further restrictions.
More broadly, we need to see a more comprehensive 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.
Alongside the furlough scheme which is currently due to finish at the end of April, and is a major plank of government support, there are also big cash flow and payment issues looming for business such as quarterly tax and VAT payments together with business rates, rents, utilities and National Insurance for furloughed staff. All these things are continuing to mount up and need government to move on measures such as business rates cancellation for the first quarter, no commercial evictions and waive immediate tax payments for example.
There is also the big question of the excluded limited companies that are still without support despite making their case to the Chancellor again and again.
Without the right level of ongoing support many of these businesses across Bristol, Bath and the region may simply not be there to power our recovery when we emerge once again. And these are part of the bedrock of businesses that (post COVID-19) will be creating the jobs, opportunities and wealth to drive our economy and country forward, and also paying the taxes that fund our public services.
Enhanced support for businesses, a turbo-charged vaccine rollout, and delivery of existing promises on mass testing must be delivered to enable the UK to restart, rebuild and renew. We would hope and expect to hear further announcements of support being announced from the Chancellor over the next few days.