Following last night’s announcement that England would go into full lockdown from midnight tonight until at least mid-February, chancellor Rishi Sunak has announced a new package of financial support for businesses closed by the restrictions. It will mean cash grants of up to £9,000 for restaurants, pubs, cafes, and bars — the sum will be calculated based on the given business’s property value.
Announcing the new £4.6 billion fund, 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 [...] 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 one-off payments will be granted to closed businesses as follows: £4,000 for businesses with a rateable value of £15,000 or under; £6,000 for those between £15,000 and £51,000; and £9,000 for those over £51,000 — roughly reflecting small, medium, and large-sized businesses.
The grants will be joined by a further £594 million in “discretionary funding” distributed to local councils for businesses ineligible for the grants. This will be positive news for restaurants previously ineligible for other government-backed schemes — like the coronavirus loan scheme — or whose business rates status leaves them unable to claim under the terms of this new announcement.
Restaurants, pubs, and bars might ask how full lockdown differs from tier four. Under both, restaurants are mandated to be closed. Why then, they might ask, wasn’t the funding forthcoming earlier? A sum of between £4,000 and £9,000 is unlikely to make a meaningful difference to rent debt accumulated over the past 10 months and counting. Ultimately, this decision and its timing are a continuation of Sunak and prime minister’s Boris Johnson desire to have it both ways when it comes to restrictions and financial support; it is tied to allowing pubs to stay open (if serving a substantial meal) and allowing restaurants to stay open (with a 10 p.m. curfew that throttles trade) without giving them money to offset their losses. The money has come when, to follow the government’s line on lockdown itself and on closing schools, it has “no choice.”
It is nevertheless money, for businesses, that badly need money. Whether it will do what the government intends, and keep businesses going all the way to spring — only time will tell.