Businesses are calling for further support to help them stave off collapse following the government’s shock imposition of Tier 4 on Saturday.
Specifically, business lobby groups are calling for the business rates holiday to be extended for another 12 months from January, VAT relief and additional direct support for businesses forced to shut.
Non-essential shops, hairdressers and leisure and entertainment venues were forced to close yesterday after Boris Johnson’s abrupt announcement on Saturday afternoon to enforce new Tier 4 restrictions amid concerns about a more virulent coronavirus strain spreading rapidly in London and the South East.
Health secretary Matt Hancock suggested yesterday Tier 4 will stay in place until the vaccine programme has sufficiently immunised the population – which could take months. There is now talk of Tier 4 being imposed until Easter.
Meanwhile, all non-essential shops in Wales will shut from Boxing Day when it mirrors England’s Tier 4 restrictions, while Scotland and Northern Ireland also go into their own three-week and six-week lockdowns respectively from December 26.
The tough new rules have destroyed hopes of any Christmas independent business recovery, with economic forecaster CEBR estimating that retailers alone face £2bn of lost sales for each week of Tier 4 lockdown.
Adam Marshall of the British Chambers of Commerce, wondered in the Financial Times whether there would be help for businesses that “paid for stock they now can’t sell”.
“What support will there be for companies whose cash flow projections have once again been thrown into chaos?” he asked.
Helen Dickinson, chief executive of the British Retail Consortium, said the consequences of Tier 4 would be “severe” for a sector that is set to lose about £2bn a week in sales. “For businesses, the government’s stop-start approach is deeply unhelpful — this decision comes only two weeks after the end of the last national lockdown and right in the middle of peak trading, which so many are depending on to power their recovery,” she said.
Dickinson said that the government “will need to offer additional financial support to help these businesses get back on an even keel” and that an extension to rates relief in 2021 “is the best place to start”.
Richard Lim, head of the Retail Economics consultancy, told The Times that the closure of non-essential retail in the run-up to Christmas would be a “crippling blow” for businesses in London and the southeast.
As for what help is available, last week the government extended the furlough scheme to the end of April. Furlough covers to 80 per cent of staff wages for hours not worked.
Businesses forced to shout can also claim grants of up to £3,000 a month. However, local authorities are still working through distributing grants from November’s national lockdown, let alone gearing up for another round of handout distribution.