Rishi Sunak to unveil £ 4.6 billion in funding for locked-up, hospitality and leisure businesses receiving £ 9,000 in grants to keep them away – as economists warn of ‘colossal’ impact with up to 10% eliminated in GDP per month
- Rishi Sunak has announced further funding for businesses after locking in news
- The Chancellor said that one-off grants would receive one-off grants of £ 9,000 to keep them going
- Economists have warned that the spread of coronavirus infection will be ‘colossal’
Rishi Sunak today announced £ 4.6 billion in subsidy for businesses locked in gray as economists warned of the ‘colossal’ impact of the pandemic.
The Chancellor has announced that institutions plagued by Boris Johnson ‘s dramatic decision will receive one – off grants of £ 9,000 to keep them away over the next seven weeks.
Around 600,000 properties across the UK are expected to receive the money, with a further £ 594million being pumped into ‘discretionary funds’ to support other affected companies.
The latest major intervention came amid fears that the lockout will reduce GDP by up to 10 percent in every month it is implemented – although the popular IFS think tank said on the morning of -today the impact could be lower as industries have changed since the first ditch in March.
It will also raise fears about the state of government finances, with IFS director Paul Johnson saying the scale of the economic downturn is the worst ‘in history as a whole’. Public sector borrowing could hit £ 400billion this year, with Mr Sunak having already warned of counting later to balance the books.
Rishi Sunak said establishments saddened by Boris Johnson’s dramatic decision will receive one-off grants worth £ 9,000 to keep them away over the next seven weeks
The warning is growing at the state of government finances, with IFS director Paul Johnson saying the scale of the economic downturn is the worst ‘in all history’
Businesses have been expressing despair over the latest grim development in a coronavirus crisis, with Mr Johnson speaking to the country last night to bring England into a new lock.
Announcing the new support this morning, Mr Sunak said: ‘The new strain of the virus is a major challenge for us all – and while the vaccine is being rolled out, we need to tighten up.
‘Throughout the pandemic we have taken swift action to protect lives and livelihoods and today we are announcing another injection of money to support businesses and jobs until the Spring.
‘This will help businesses get through the coming months – and crucially will help sustain jobs, so employees can be ready to return when they can reopen.’
A further £ 594million is available for local authorities and the devolved administrations to support other businesses that are not eligible for the grants.
The Treasury said the new one-off grants are in addition to billions in existing business support, including grants of up to £ 3,000 for closed businesses, and up to £ 2,100 per month for one-off and that businesses are reopening.
But they are unlikely to be enough for many businesses, which have been claiming VAT and tax relief has been extended throughout 2021.
Wild small business owners say their non-essential stocks could go under a third of a national lock – with one desperate pub owner reporting that it has gone nearly a year without income. (file image)
Last night Prime Minister Boris Johnson struck England in the third national lock – sparking a crisis among business owners in need of support
Many hard-core small business owners say their stores could be a ruin under the new lock that will last until at least the February half-term. Mr Johnson also failed to mention financial support measures in his address.
Jasmine Whitbread, chief executive of London First, said: ‘Businesses across the country are wondering how they are going to survive the spring. The Government now needs to extend business rates and VAT relief throughout 2021 and stand ready to pump more direct support to closed businesses. ‘
Adam Marshall, chief executive of the British Chambers of Commerce, will be a ‘baffled and frustrated’ business, with Mr Johnson not announcing ‘additional support for businesses affected by these new restrictions’.
He said: ‘Tens of thousands of companies are already in a precarious position, and are now experiencing a period of hardship and other hardship.
Billions have already been spent helping good companies survive the unprecedented crisis and save jobs. These businesses can no longer be allowed to fail, when the spread of the vaccine sheds light at the end of this long tunnel. ‘