Covid-19 measures: What does the Chancellor’s £1bn support package mean for business and what else is needed?

Greater Birmingham Chambers of Commerce

Chancellor Rishi Sunak has set out measures to help England's hospitality sector as it struggles with a collapse in bookings sparked by the rise in Covid cases.

The Chancellor unveiled a £1 billion fund including cash grants of up to £6,000 per premises for each eligible firm.

He said the government would also help certain firms with the cost of sick pay for Covid-related absences.

An extra £30m has also been announced to help theatres and museums.

However, business leaders in Greater Birmingham say short and long-term clarity is still needed on the government’s anti-Covid measures following the Prime Minister’s assertion that there would be no more restrictions before Christmas.

Greater Birmingham Chambers of Commerce called for an immediate response to questions about the £1 billion support package and the longer-term support for impacted businesses.

Here, the Chamber sets out questions that require answers from government.

GBCC’s action plan for Government:

Provide short-term clarity on:

  • Speed: How quickly the Chancellor’s £1bn support package will reach businesses. Past announcements on COVID support have often been followed by significant delays – particularly in Government departments issuing detailed guidance to local authorities to enable them to get started
  • Duration: The period that this support intended to cover – and whether any additional support would be provided if restrictions and conditions continue as they are significantly into the new year
  • Next Steps: The further restrictions that are under consideration in the immediate term following Christmas, whether businesses will be given due notice of any additional restrictions ahead of implementation and whether further support will be provided in the event of significant additional restrictions
  • Extent of Support: Whether the additional ARG support will go far enough considering the volume of impacted sectors not included in the hospitality and leisure grants, the needs of businesses with high overheads and limited to exhausted existing discretionary funds held by local authorities. Additional impacted sectors include: tourism, travel, non-essential retail (where footfall has been significantly impacted), wider events, visitor economy and their supply chains from a variety of sectors

The long-term support required:

  • Consistent review of the need for additional financial support for businesses that are likely to suffer as a result of the drop in consumer demand or further restrictions
  • Expediating the rollout of the Business Rates Relief Fund so local authorities can help impacted businesses as soon as possible
  • Maintaining a longer-term reduction of VAT in place beyond March to help those hospitality and non-essential retailers likely to suffer due to lower footfall in city centres
  • Reducing the cost of PCR testing for international travellers in a bid to maintain demand in the aviation and travel industry
  • Reintroducing free testing kits for businesses as more individuals are expected to take daily tests
  • Providing flexibility of the repayment of CBILs to those businesses suffering significant financial hardship but not classed as in distress

The GBCC’s calls for action have been echoed by a number of member businesses: 

Tracey Stephenson, co-founder and joint managing director of  Staying Cool:

The Government’s latest support package is a much-needed boost for our industry during an incredibly challenging time.

We are pleased to see that further targeted grants for businesses like us are being introduced; however, these do not reflect the scale of the economic problem we are facing.

We also need urgent clarification on any potential incoming Covid-19 restrictions, how Government plans to boost consumer confidence, and what further financial support they will provide if the current situation worsens.

Hamza Waris, chief operating officer at Pak Travels:

It is incredibly disappointing to see a lack of Government support for the tourism and aviation industry, who have been devastated over the past two years, in yesterday’s announcements.

Whilst some of the Chancellor’s measures, such as the ARG top up, will help support businesses across the country who are not eligible for the hospitality grant, it is merely a drop in the ocean compared to the sheer scale of economic loss our industry has experienced.

Sam Morgan, chief executive officer of About Dining – Craft, Divide, 8 and Divide by 8:

At face value, £1 billion sounds like a large amount of money; however, when you consider £6,000 is equivalent to 7.4 per cent of business we have lost, you realise it really isn’t.

The Chancellor uses previously issued grants as the benchmark for the £6,000 being applied, but previous grants were woefully inadequate as only covered 13.9 per cent of the loss we incurred. This simply shows a repeat of the previous lack of support which meant businesses needed to take out substantial debt to survive.

The Government’s response continues to demonstrate a lack of understanding and appreciation for the scale of the problem caused by the pandemic.

Andrew Goodacre, chief executive of British Independent Retailers Association:

Independent retail, and retail in general, will feel very disappointed with this announcement.

Retail seems to be the forgotten part of the high street. Shops do not have cancelled bookings to shout about. However, we do have lower footfall, cancelled trips to the hops and cancelled purchases – just as much damage but just not as ‘visible’.

The Chancellor claims to respond proportionately but he has done nothing for independent retail – a key part of any good high street that will also fail if nothing is done.