Chancellor Rishi Sunak has announced a grant worth up to £9,000 for retail, hospitality and leisure businesses hit by the new lockdown.
The one-off payment is expected to benefit more than 600,000 business properties across the whole UK, at a total cost of £4bn, the Treasury said.
Mr Sunak also announced a £594m discretionary fund to support other businesses hit by the coronavirus shutdown announced on Monday by Boris Johnson, which is expected to last until at least 22 February in England.
The one-off grant will be provided to firms on a per-property basis, with £4,000 going to those with a rateable value below £15,000, £6,000 to those with a value between £15-51,000 and £9,000 above this level, said the Treasury.
Discretionary payments will be made available via local authorities and devolved administrations.
Mr Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.
“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.
“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”
The move represents the first government response to appeals for help to ensure firms’ survival through the new lockdown, and was welcomed by the Institute of Directors, which said it would “go some way to reassuring the worst-affected businesses”.
But IoD director of policy Roger Barker warned: “The chancellor must remain wary of a spring cliff-edge in business support as the furlough scheme and other support measures unwind.”
The furlough scheme, which pays up to 80 per cent of the wages of workers who would otherwise be laid off, is due to run until the end of April.
Employers are currently covering National Insurance and employer pension contributions for hours not worked at an average cost of around £70 per employee per month.
The government has also provided grants worth up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen, as well as 100 per cent business rates relief for retail, hospitality and leisure businesses, £1.1 billion in discretionary funding through local authorities and 100 per cent government-backed loans.
While accepting the tough measures announced by Mr Johnson were necessary for public health, the CBI last night warned they would impose “significant” costs on businesses already reeling from nine months of restrictions and the severely curtailed Christmas period.
Speaking ahead of the announcement of Mr Sunak’s package, CBI director general Tony Danker said it was “imperative” that the government ensure companies have the necessary cashflow to survive through the new lockdown.
He said ministers should also review and plug coverage gaps in existing support.
Firms needed “a clear line of sight and assurance that support will be there for as long as restrictions are in place so that they can stay the course rather than act precipitously”, said Mr Danker.
