Rishi Sunak has set out plans to offer more financial support to businesses struggling under England’s third nationwide lockdown.
Retail, hospitality and leisure businesses are set to receive a one-off grant of up to £9,000 per property to help them survive.
Taxpayers will fork out another £4bn for the business grants, which will benefit more than 600,000 struggling business.
It comes after business bodies yesterday warned that an immediate nationwide lockdown for at least seven weeks will cause an £8bn blow each month in lost sales.
Leading figures across sectors added that thousands of companies will crumble under the latest lockdown without fresh financial support.
The new restrictions mean non-essential retail, hospitality and personal care services must close until at least mid-February as the government scrambles to contain a new coronavirus mutation tearing across the country.
Analysis from Altus Group showed that almost 550,000 businesses will be forced to shutter under the nationwide lockdown, including more than 400,000 non-essential shops and 37,000 pubs.
That could mean a hit of almost £18bn to the economy each month, according to free market think tank the Institute of Economic Affairs.
The new measures will also result in an estimated blow of around £2bn per week in lost sales, according to the British Retail Consortium (BRC), in a pandemic which has already seen more than 178,000 retail jobs lost and more than 250,000 retail staff left in furlough limbo.
“Retailers want to trade their way to recovery but if they are forced to close then further financial support will be needed or many businesses will go bust and thousands of viable jobs will be lost,” said BRC chief Helen Dickinson. “The biggest difference the government can make is to extend business rates relief from April for those hardest hit by repeated lockdowns.”
The Confederation of British Industry (CBI) has urged Rishi Sunak to extend access to business loan schemes and furlough scheme beyond the current deadline of the end of March in a bid to avoid thousands of business closures and a wave of redundancies.
“We need to acknowledge that the economic impact of these new restrictions is significant,” said CBI boss Tony Danker.
The maximum business support grants of £3,000 will not be enough to support businesses through the next lockdown, added Adam Marshall, director general of the British Chambers of Commerce (BCC).
“We need more support for affected businesses and we need the support to last through 2021. Stop-start lockdowns and stop-start support are the worst of all possible worlds,” he added.
The London Chamber of Commerce and Industry (LCCI), the largest business network in the capital, warned that the new national lockdown would deal a hammer blow for businesses already suffering from decimated Christmas sales.
“With London already in a Tier 4 lockdown, our research shows that 2021 has started with business confidence at its lowest point since the financial crash in 2008,” said Richard Burge, chief executive of the LCCI.
“The extension of the furlough scheme to the spring was welcome, but it will remain a cliff edge as we get nearer, as are the end of the VAT and business rate relief periods. These must be extended,” he added.
Burge urged ministers to roll out council-led grants for the capital, warning that thousands of London businesses would go bust without substantial financial support and a clear strategy for exiting lockdown,
“Government needs to understand that this is a London Marathon. You plan for the long-haul, you have feeding and water stations all along the way, and support after the finish line,” he said. “The Treasury needs to produce their plan for this marathon. At the moment, they are absent on duty and London may fall as a consequence.”
A Treasury spokesman said: “We have confirmed the furlough scheme will remain in place until the end of April and that companies will have until the end of March to access generous government loan schemes.
“We have always been clear that we will do whatever we can to support businesses and protect jobs, and we will continue to keep all our support schemes under review.”