Businesses need crucial Covid support measures now, UK firms tell chancellor
British Chambers of Commerce suggests raft of measures to help companies as consumer confidence plunges over Omicron fears
- Labour tells Rishi Sunak to fly back from US to help companies
Last modified on Thu 16 Dec 2021 05.42 EST
Business groups have accused the chancellor, Rishi Sunak, and Kwasi Kwarteng’s business department of failing to act as the Omicron variant hammers consumer confidence and forces many to firms to shut down ahead of the usually busy Christmas period.
The British Chambers of Commerce (BCC) said businesses have “heard nothing from the Treasury since this new round of Covid interventions arrived over a week ago”, adding that it was crucial that more support was available now as shops, theatres and pubs see “their vital festive income melt away in front of their eyes”.
Here are some of the emergency support measures that businesses are calling for:
Reduce VAT for hospitality and tourism back to its emergency rate of 5%
In July 2020 the government cut the 20% VAT rate to 5% before increasing it in March this year to 12.5%. The current discount runs out in April, when it is due to return to 20%.
Reinstate 100% business rates relief for retail
The BCC said this was needed to give businesses “the financial headroom to weather this challenging period”. Firms were able to claim 100% business rates relief until July when the discount was cut to 66%. Sunak said the programme will expire next April.
Make additional grant funding available
Funding to be administered locally by councils after they have judged which businesses face a cash crisis.
If ministers adopt plan C measures that come close to a fourth lockdown then “the government should remain open to increasing grant funding” to all businesses, the BCC said.
Reintroduce furlough (including flexible-furlough) for those sectors most exposed to the new measures
The furlough scheme closed altogether in September after the level of government support was reduced from 80% to 60% over the preceding three months. Business groups have asked for the 80% scheme to be reinstated.
Further support for businesses who have used government loan and tax deferral schemes.
Hundreds of thousands of businesses have taken out loans that must be repaid. Those that have yet to repay loans or applied for tax deferral schemes should be allowed to take longer repaying them.
HMRC, which has preferential creditor status in insolvencies, should also outline what steps it will take to play in supporting businesses at risk of failure.
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