‘Body blow’ as businesses pin lockdown hopes on vaccination success
Around 600,000 retail, hospitality and leisure sites will be able to claim a one-off grant of up to £9,000, the government has announced.
The payments will cost the Treasury £4.6bn and are aimed to help support the high street as new lockdown measures announced on Monday by the prime minister take hold.
Chancellor Rishi Sunak also announced a further £594m for local authorities and devolved administrations to support businesses not eligible for the grants.
On Tuesday (December 5) Cambridgeshire Chamber of Commerce chief executive John Bridge described the new lockdown as “a body blow” to the local economy.
“The lockdown announced is a body blow to our business communities, hard on the heels of lost trade during the festive season and uncertainty linked to the end of the Brexit transition period,” Mr Bridge said. “Tens of thousands of firms are already in a precarious position, and now face a period of further hardship and difficulty.
“Billions have already been spent helping good firms to survive this unprecedented crisis and to save jobs. These businesses must not be allowed to fail now, when we are told the vaccine rollout provides light at the end of this long tunnel.”
Mr Bridge added: “Many smaller firms won’t qualify for the full headline amounts set out in the Chancellor’s press release, and will be left struggling to see how this new top-up grant will help them out of their cashflow problems.
“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.”
Rain Newton-Smith, Confederation of British Industry chief economist, said: “Extending the job retention scheme to end of the second quarter would provide firms with a clear line of sight, aiding planning and investment.
“Removing the business rate relief cliff edge in April will provide much-needed breathing space, as will re-examining the case for VAT deferrals.
“Maintaining steadfast support for firms during this painful period will help ensure the recovery is delayed for as short a time as possible.”
The stage is now set for a race between the roll-out of the vaccine and the resilience of the business community. Get it right – or, as the Prime Minister puts it, “if things go well and with a fair wind in our sails” – and more businesses will survive. Get it wrong and the economy will suffer even further egregious losses.
With all eyes on the roll-out of the vaccination programme, businesses will be hoping the recovery can start in spring. The alternative - of delays in the vaccination rollout through the year and even into 2022 – is almost unthinkable, and such a worst-case scenario is one the government is unlikely to survive: there have been too many mishaps already.