Chancellor of the Exchequer Rishi Sunak rolled out 4.6 billion pounds ($6.2 billion) of new support to help UK businesses forced to close during the pandemic, as the country enters its third lockdown.
Retail, hospitality and leisure businesses will be entitled to one-off top up grants of as much as 9,000 pounds ($12,233) to tide them over until the spring, the Treasury said in a statement Tuesday. That’s on top of existing grants of as much as 3,000 pounds per month for companies required to shut their doors because of coronavirus restrictions.
The additional aid comes after business groups demanded more support in the wake of new coronavirus restrictions announced by Prime Minister Boris Johnson. It adds to the 280 billion pounds it has cost the government so far to tackle the virus and support firms and workers through the pandemic.
“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,” Sunak said in the statement.
Sunak also made a further 594 million pounds of discretionary funding available to businesses in other sectors that are also impacted by the coronavirus lockdown.
Before Tuesday’s announcement, the Federation of Small Business said the level of grants “is off the mark by an order of magnitude” and also suggested business rates relief should be extended beyond the end of the tax year in April. Meanwhile Stephen Phipson, the head of the Make UK manufacturing lobby group, called for a six-month plan to give businesses certainty of support. As things stand, the government’s main support program for workers — the furlough plan which pays them as much as 80% of their wages — is due to close at the end of April. Support for the self-employed also will run through April, while business loan programs are due to close to new entrants at the end of March.
UK heads for deeper
double dip recession
Britain is headed for a sharper double-dip recession after Prime Minister Boris Johnson plunged the nation back into a lockdown with no clear end.
Economists said the action, announced to prevent the health service from being overwhelmed by surging coronavirus infections, all but certainly means the UK economy will shrink in the first quarter. That will delay the recovery from the worst downturn in three centuries, which analysts say already was
unlikely before 2023.
Closing schools means this hit will be worse than the restrictions imposed in November, according to Bloomberg Economics. It also puts pressure on Sunak to spend more supporting businesses and workers, an effort the Institute of Economic Affairs said the measures may cost the economy 18 billion pounds ($24 billion) a month — the equivalent of 18% of gross domestic product. While the damage from the latest lockdown is not predicted to be as severe as the record 18.8% contraction in the second quarter of last year, it continues a torrid period for the United Kingdom and may boost the long-term scarring effects of the virus.