Leaders respond to Chancellor’s coronavirus winter plan

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London leaders have warned that Rishi Sunak’s new package of coronavirus support for businesses and workers does not go far enough for the capital.

Businesses and politicians welcomed more cash and tax breaks – but said hard-hit businesses like pubs, restaurants, nightclubs and theatres will need sector-specific deals.

The Chancellor announced a wage subsidy to replace the furlough scheme at the end of next month.

From November:

  • The six-month job support scheme will let employers keep staff on reduced hours rather than making them redundant.
  • Employees will work a third of usual shifts, and for the time they are not not working their company will top up a third of their normal wages with the Government also paying a third.
  • This means staff pay will be cut by more than a quarter (28%).

Smaller businesses will be prioritised, with large corporations only eligible if their turnover has fallen by a third or more during the pandemic.

The Chancellor also announced steps to ease the pressure on businesses:

  • Emergency coronavirus loans will be extended from six to 10-year repayment plans.
  • Firms can pay back interest only or suspend repayment entirely if they are struggling financially.
  • Current schemes will be extended to the end of the year, with new loans available in 2021.
  • The 15% VAT cut for hospitality businesses will now run until the end of March.

Mr Sunak admitted that controlling the second wave of the virus will “pose a threat” to the UK’s economic recovery

Some 13.5 million Brits are currently living under local lockdowns, with London now on the national watch list for further restrictions.

And politicians and business chiefs in the capital warned that the Chancellor’s plans may not go far enough for London.

Mayor Sadiq Khan said he was “relieved” by the announcement but argued ministers should have taken action sooner.

Many shops, restaurants and theatres are on a “financial knife edge” and may still have to make redundancies, he warned.

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“Once again, the Government are playing catch up with measures that fail to address the scale of the challenge faced by London’s economy,” Mr Khan said.

London Chamber of Commerce chief executive Richard Burge agreed that the wage subsidy may not be enough to help firms keep staff on.

“Many companies have diligently kept going during these last six months, or have reopened and tried to recover – but their trade and revenue isn’t where it needs to be right now,” he said.

And while staving off loan repayment and extending the slashed VAT rate will help, the return of high business rate payments will soon be a “ball and chain” on recovery, he warned.

Central London businesses will be particularly hard hit by the resurgence in rates, because their prime location means a higher rateable value.

But footfall is just half normal levels in the city centre – and commuters have now been told to abandon the office, while international tourism is also vastly reduced.

John Dickie, policy director for business group London First, also warned that high business rates could damage London’s recovery.

“The level of government backing has been significantly reduced at a time when the pace of recovery is uncertain and confidence is low,” he said.

“This must be kept under review to ensure that the support matches the restrictions and the level of need throughout the winter months.”

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