News of a new national lockdown has been followed up pretty quickly this morning with another package of government financial support for businesses.
Chancellor Rishi Sunak has announced £4.6 billion of new lockdown grants, designed to support businesses and project jobs as the Covid-19 pandemic heads rapidly towards its one year anniversary.
In this video, I’m taking a look at how that £4.6 billion is going to be allocated, explaining why you might be in line for a one-off £9,000 grant.
Last night, Boris Johnson announced tough new measures designed to bring the spread of the coronavirus back under control.
I’m hearing lots of people say, this time it’s different; because of course, this time, we have a vaccination programme underway. But so much will depend on the speed of this programme and how quickly the NHS can vaccinate the most vulnerable in society.
This morning on Sky News, cabinet minister Michael Gove refused to be drawn on a likely timescale for this lockdown, but admitted that it could well go into March.
In my lockdown reaction video last night, I said that “I suspect we’re going to hear in the coming days from Chancellor Rishi Sunak”. And hear from the Chancellor we have, pretty quickly in fact, at 9am this morning.
Sunak announced £4.6 billion of additional government funding to support businesses and jobs.
This includes new one-off top-up grants for retail, hospitality and leisure businesses, that will be worth up to £9,000 per property. These grants are designed to help businesses stay afloat until the Spring.
He also announced a £594 million discretionary grant scheme designed to support other impacted businesses; those that won’t qualify for the one-off grants.
And there’s an additional £1.1 billion worth of further discretionary grant funding for local authorities, Local Restriction Support Grants worth up to £3,000 a month, and an extension of the furlough scheme. Again!
He’s buried the lead a bit there, hasn’t he? Furlough for longer. Now until the end of April.
Let’s start by taking a closer look at that, and what it means for employers and staff. And then I’ll come back to these one-off grants and the criteria for those.
The Coronavirus Job Retention Scheme allows employers to place their employees on ‘furlough’ and pay them 80% of their usual wages, up to a maximum of £2,500 a month, funded by a government grant. Employers only pay for the cost of their pension and national insurance contributions and can opt to top-up wages to 100%.
The furlough scheme had already been extended until March, so this morning’s announcement adds a further month to the scheme, giving employers a little more certainty.
We know that this lockdown is going to last until at least mid-February, and likely a little longer than that. With forecasts suggesting that unemployment wil peak in the summer at 7.5%, the longer furlough is an option available to employers who would otherwise lay off staff, the better.
The one-off grants for closed businesses is expected to cover more than 600,000 business properties, with total grants of £4 billion paid across the UK. The amount you can claim will depend on your rateable value and is only available to closed businesses.
You can claim £4,000 for a business with a rateable value of £15,000 or less, £6,000 for a rateable value between £15,000 and £51,000, and £9,000 for a rateable value of more than £51,000.
As before, these grants will be funded by government but administered and paid out by local authorities, so you need to look at your local council website to details of their application process.
Chancellor Rishi 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.”
Local authorities will also be distributing a further £594 million to support businesses that are not eligible for the one-off grants, but are affected by the new restrictions. Again, you will need to look to your local authority for details and how to apply.
Support for businesses is a devolved policy, so the administrations in Northern Ireland, Scotland and Wales will receive funding under the Barnett Formula, and then be responsible for allocating that money. Which means the grant schemes outlined in this video are only confirmed so far for businesses in England.
The Scottish government will receive £375 million, the Welsh government, £227 million, and the Northern Ireland Executive, £127 million.
Is all of this enough to get businesses through the latest set of restrictions? Nothing replaces the ability to do business with your clients or customers, and make profit. Grants, loans and furlough schemes might be enough to keep businesses ticking over for the next few months, but what I would love to see, once this lockdown is lifted, is a significant programme designed to relaunch small businesses across the UK.
In some countries, we’ve seen people given pre-paid cards loaded with cash to spend in High Street businesses, and this ‘helicopter money’ approach would be very welcome in the UK too, once the lockdown is lifted.
What do you think of the latest round of support announced by the Chancellor?
