Chancellor unveils more financial support for lockdown-hit firms

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An empty high street in Worcester this morning Max Willcock/EMPICS Entertainment

Retail, hospitality and leisure businesses will be able to apply for one-off grants of up to £9,000 per property, in addition to existing financial support, as new lockdowns are introduced across England and Scotland.

Under the new restrictions in England all non-essential retail, hospitality and services must close until at least mid-February. Schools will remain open only for vulnerable children and the children of key workers, but early years childcare will continue to operate.

Similar restrictions were brought in in Scotland at midnight on Tuesday and will remain in place until the end of January.

After the Prime Minister’s announcement was met with dismay from business groups, who said organisations needed more financial support to weather further disruption, chancellor Rishi Sunak unveiled a £4.6bn package of support for businesses that had been forced to close.

One-off top-up grants of up to £9,000 per property will be available to retail, leisure and hospitality firms, while a £594m discretionary fund will be made available via local authorities and devolved administrations to support other businesses affected by the crisis.

HM Treasury said the additional funding is expected to benefit more than 600,000 business properties across all UK nations.

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 new grants come in addition to existing business support including grants of up to £3,000 for closed businesses, 100% business rates relief for retail, hospitality and leisure; and the furlough scheme, which will run until the end of April.

British Chambers of Commerce director general Adam Marshall said organisations would be “baffled and disappointed” by the fact that Johnson had not announced more financial support when he addressed the nation on Monday evening.

He said: “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 the vaccine rollout provides light at the end of this long tunnel.”

British Retail Consortium chief executive Helen Dickinson commented: “The consequences of these latest restrictions – with non-essential retail already closed for several weeks – will be severe for many businesses who yet again face losing £2bn per week in sales. Already, 178,000 retail jobs have been lost in 2020, and with over 250,000 retail staff currently on furlough, that number could increase dramatically in the new year.”

Impact on employees

Clinically vulnerable employees will be asked to ‘shield’ again and will receive letters informing them whether this applies to them over the coming days.

Guidance to work from home if possible continues to apply, with employers encouraged to make use of the furlough scheme if a worker cannot perform their job from home.

Alan Price, CEO of advice service BrightHR, said official guidance had been amended to make it clearer where staff are allowed leave home to work.

“Work from home guidance has already changed several times for England, with previous wording providing a degree of flexibility to employers around whether staff could work from home and do so effectively. Now, the guidance is much clearer. People should only leave their home for work where it is ‘unreasonable’ for them to work from home,” he said.

Work from home guidance has already changed several times for England, with previous wording providing a degree of flexibility to employers around whether staff could work from home and do so effectively. Now, the guidance is much clearer” – Alan Price, BrightHR

“The knock-on effect of this is that employers will need to consider if any of their employees can reasonably work from home and take steps to implement the change. Employees are certainly more likely to encourage management to re-think their approach to this, and if a business is going to keep staff attending a workplace, they need to ensure they have followed all advice on making it Covid-secure.”

He said staff who are shielding are entitled to receive statutory sick pay (SSP) for the period of time that they cannot work.

“There are a number of options open to a company in this situation. Those with less than 250 members of staff can still make use of the SSP Rebate Scheme, which funds up to two weeks of SSP for coronavirus absences. Alternatively, the furlough scheme remains an option for all businesses to now use if eligible, even if they have not done so before and will do so until April,” said Price.