The government is coming under greater pressure to release billions of pounds in new support for businesses in the wake of its targeted aid for those hit by local lockdowns.
Chief Secretary to the Treasury Stephen Barclay confirmed on Tuesday afternoon that “lifeline” cash grants of up to £1,500 were to be made available to firms ordered to close in England amid renewed efforts to halt the spread of coronavirus.
While the latest aid package was welcomed, the British Chambers of Commerce declared that it “will not be enough” for most businesses amid continuing disruption to trade since the hibernation of the economy began in March.
Where jobs are being lost in UK economy
Where jobs are being lost in UK economy
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The CBI said it was clear that “more targeted support” would be needed this autumn as the government’s furlough scheme ends and the nation faces up to warnings of a jobs crisis.
The Bank of England has forecast that three million could be unemployed by the end of the year with the UK’s jobless rate hitting 7.5%.
Mr Barclay used his remarks to MPs to say the lifeline grants were an important “next step” in the government’s plan to protect jobs and businesses.
“Closed businesses with a rateable value of £51,000 or less will receive a cash grant of £1,000 for each three-week period they are closed.
“For closed businesses with a rateable value higher than £51,000, the grants will be £1,500.
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“The grants will cover each additional three-week period, so if a small business is closed for six weeks, it will receive £2,000.”
Labour has argued that the conclusion of the UK’s Job Retention Scheme next month risks sparking a tidal wave of job losses as businesses are yet to recover from the effects of the lockdown.
Introducing an Opposition debate on the jobs crisis, shadow Chancellor Anneliese Dodds called on ministers to change course.
‘Government lurching from crisis to crisis’
She told MPs: “We believe government needs to be sitting down, talking to exactly those stakeholders that it trumpets so much it worked with when it created the furlough scheme, so that it can provide that system of support that is necessary to protect jobs, to protect our economic capacity.
“And as I have said time and time again, we do not believe that a continuation of the furlough scheme precisely as it stands now is what is required, we need a targeted wage support scheme which, as I will go on to mention, is exactly the
approach being taken by huge numbers of other countries but which this government is turning its face against.”
National chairman of the Federation of Small Businesses, Mike Cherry, welcomed the prospect of lifeline grants.
He said: “Though a lot of firms have now been able to reopen, thousands are still impacted by local lockdowns and sector-based restrictions.
“That’s why this intervention is so critical – throwing a much needed additional financial lifeline to those most harmed.
“We look forward to working with government to make sure there is a straightforward claims process for all firms affected.”