New lockdown funds don’t go far enough to help small businesses in crisis.
That’s the message from the Federation of Small Businesses (FSB) as Rishi Sunak unveiled a raft of new measures being made available to firms in the retail, hospitality and leisure sectors in England.
A pot valued at £4.6billion will mean firms can apply for up to £9,000 in grant funding to address latest trading restrictions imposed by Government.
The package also included a £594m discretionary fund for other businesses that might be affected.
Mr Sunak said: “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.”
But FSB National Chair Mike Cherry said there is a need for a plan that matches the scale of the economic damage.
“For many it just won’t be enough for businesses who are already under the cosh and on the brink.
“These funds come after a disappointing festive period and are followed by a last minute lockdown and do not go far enough to match the scale of the crisis that small firms are facing.
“There remain too many groups who need more support to weather this storm such as the newly self-employed, those in supply chains and company directors.
“We continue to call on the government to create a Directors Income Support Scheme, mirroring the Self Employed Support Scheme, in the form of a taxable grant for directors of limited companies calculated at 80% of three months average monthly trading profits, paid out in a single instalment and capped at £7,500.
“We also need to see the government make clear its plans for more finance capabilities made available to those who have used their allocations through Bounce Bank Loans as well as extending the period before repayments begin.
“This lockdown is expected to last for some time, even when restrictions ease, many small firms will be unable to function at 100 per cent, if at all. Which is why the government should create a Spring Economy Plan to help firms get through to drive a vaccine-enabled recovery.
“After clawing their way through 2020, the start of the new year looks set to be an even worse one for many. Small businesses are the backbone of our economy, and it is absolutely vital we support them in every way possible until the crisis finally begins to ease.”
London Chamber of Commerce & Industry welcomed the latest raft of support, but urged the Chancellor to look beyond Spring and extend business rate and VAT relief periods.
LCCI’s CEO Richard Burge warned that this is “not yet the final sprint of the London Marathon”.
He said: “These grants will be welcomed by businesses who have been forced to close, and particularly those in London with a rateable value above £51,000 – who have previously not been able to access such grant support.
“But the Government need to demonstrate they understand that this remains a marathon, it’s not yet the final sprint. They must better support businesses to stop them falling before the finish line, and indeed once they’ve reached it.
“As such, we need to see the Chancellor is looking beyond Spring. Extension of the VAT and business rate relief periods would show government understand that our economy will not fully recover until vaccination rollout is complete and London’s tourism and global economy recovered – which will be beyond Spring realistically.”