Credit, Collections & Insolvency News
The Government has announced £1 billion in support for businesses most impacted by Omicron across the UK.
The new measures will mean businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premises, plus more than £100 million discretionary funding will be made available for local authorities to support other businesses.
The Government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers across the UK
Whilst £30 million further funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter
Around 200,000 businesses will be eligible for business grants which will be administered by local authorities and will be available in the coming weeks.
Chancellor of the Exchequer, Rishi Sunak said “We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time. So we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the Culture Recovery Fund.”
“Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to Get Boosted Now.”
These additional measures will reinforce the existing package of business support, including:
Responding to the announcement of new Government support measures for small firms, Federation of Small Businesses (FSB) National Chairman Mike Cherry said “These positive measures will help alleviate the intense pressures that small firms are currently under, and hopefully arrest a significant decline in confidence over this year. With the prospect of one million people sick or self-isolating by January, we encouraged the Chancellor to bring back the Covid statutory sick pay rebate – we’re pleased to see our recommendation taken forward today.”
“This move will reduce stress for small employers up and down the country, helping those who are struggling most with depleted cashflow. It’s vital that small firms – once again up against a massively disrupted festive season – can reclaim the costs of supporting staff.
“The Government has also rightly taken forward other aspects of our ten-point plan, with £1bn worth of grant support for the hardest-hit sectors in England, alongside accelerated delivery of the £1.5bn business rates relief fund for supply chains launched months ago.”
“The encouragement of HMRC to give as much breathing space as possible to small firms as we head towards tax return season will also come as a relief to many. We’ve always said that support needs to move in lockstep with restrictions, and this intervention will help give small businesses confidence that this is the approach the Government will be taking.”
Susannah Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown said “The Chancellor has rushed out with the first aid kit to help an industry reeling from the blow of the Omicron wave, but the help is likely to come too late for businesses crippled by mass cancellations in the run up to Christmas.”
“For smaller firms, the money may help stem some cash flow issues, but the £6,000 pound grants will amount to little more than a meagre sticking plaster for many larger businesses. The promise of help appeared to underwhelm investors with shares in pub chain JD Wetherspoon and Mitchell and Butlers losing some of the morning’s gains, immediately after the chancellor’s announcement. Wagamama owner, the Restaurant Group also drifted slightly lower, amid uncertainty about the weeks ahead and Premier Inn owner Whitbread edged down after gaining significant ground earlier in the session.”
“The problem is, many companies just don’t know how long customers will stay away, or whether fresh social distancing restrictions could be imposed in the New Year. The Chancellor again said nothing could be ruled out, adding to the dark cloud of uncertainty hanging over the sector.”
TUC General Secretary Frances O’Grady said “Workers need help now to pay their bills. But the economic support measures announced today are not conditional on employers keeping workers on and covering their wages. And they do nothing to fix the gaping holes in our sick pay system.”
“The government has abandoned hospitality, arts and leisure staff. Millions of workers will go into Christmas worrying for their jobs and anxious about what they will do if asked to self-isolate.”
“The chancellor must go back to the drawing board. We need a new targeted furlough scheme that covers at least 80 per cent of workers’ wages, and that guarantees that no-one furloughed is paid less than the minimum wage. And we need decent sick pay – paid at the real Living Wage – available to everyone.”
“New TUC polling carried out this weekend and published today shows that nearly 8 in 10 (77%) people think the government should reopen furlough at least for some industries if new public health restrictions force businesses to close. The poll, carried out for the TUC by YouGov, shows that fewer than one in ten (eight per cent) people oppose the reintroduction of furlough due to the Omicron variant.”
“Yesterday, trade body UK Hospitality warned that 10,000 pubs and restaurants may close permanently without additional financial support.”
Mark Supperstone, Managing Partner at ReSolve said “This generous support package is a sensible step by the Chancellor. It alleviates some of the acute and sudden pain many businesses are feeling during the year’s most important spending season and gives them breathing room to prepare for the year to come.”
“While we do not know how Omicron will pan out nor its impact on the economy, from what we have seen with previous waves is that SMEs, which are the backbone of the UK economy, are the most vulnerable. Time will tell if the package goes far enough to help these businesses recover the lost revenue from the busiest time of year but we hope it does.”