Business chiefs and senior politicians say new lockdown grants from the government do not go far enough, with many firms and workers “fall[ing] down the cracks”.
Chancellor Rishi Sunak announced £4.6bn ($6.3bn) in new grants of up to £9,000 for businesses on Tuesday. The new grants come after the imposition of a third national lockdown on Monday evening.
While business leaders welcomed the support package, many it was not enough to help everyone in need. Just £594m has been earmarked for companies not in the retail, hospitality or leisure sectors. Industry chiefs said more was needed to help firms across the wider economy.
“Support must be sufficient to cover not just those on the front line of retail, hospitality and leisure, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions,” said Adam Marshall, director-general of the British Chambers of Commerce.
Marshall said many smaller firms would not qualify for support and would be “left struggling to see how this new top-up grant will help them out of their cashflow problems”.
Emma McClarkin, chief executive of the British Beer & Pub Association, said the new support would give UK pubs a boost but leave brewers — their suppliers — out in the cold.
“The sooner we hear of the long term support for the sector the better,” she said.
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The new grants announced on Tuesday are based around business premises. Critics said this means large parts of the economy that don’t work out of offices or shops will also be ineligible. This includes taxi drivers, cleaners, and many self-employed who work from home.
Steve Wright, chairman of the Licensed Private Hire Car Association, told Yahoo Finance UK many smaller mini-cab and taxi firms would “fall down the cracks completely”.
Derek Cribb, chief executive of IPSE (the Association of Independent Professionals and the Self-Employed), said the support package “misses the mark and will do little to mitigate the financial damage to the self-employed sector.”
Mel Stride MP, Conservative chair of the Treasury select committee, said: “The Chancellor must not forget those who have fallen through the gaps around previous support packages as we identified in our report last summer.”
The Treasury committee’s report found large numbers of people were suffering hardship because “arbitrary” conditions meant they couldn’t access government support. Those shut out included people in new jobs, the newly self-employed, limited company directors and freelancers on short-term contracts.
Mike Cherry, chair of the Federation of Small Businesses, said more support was needed for company directors, a group that have repeatedly been overlooked.
London mayor Sadiq Khan said it was “scandalous” that an estimated three million people were still unable to access support for their businesses.
The chancellor has repeatedly declined to extend help to such groups despite intense lobbying, highlighting fraud risks and saying the government cannot protect every job.
The £594m pot for the broader economy will be distributed by local councils on a discretionary basis. Richard Watts, chair of the Local Government Association, which represents councils, said: “This amount will need to be kept under review to ensure it is sufficient to meet demand for support.”