Sunak offers £4.6 billion in grants to firms affected by lockdown

The government offered a £4.6 billion support package for businesses on Tuesday to soften an expected recession caused by a surge in COVID-19 cases that has prompted a third national lockdown.

Prime Minister Boris Johnson announced the lockdown on Monday, saying a highly contagious coronavirus variant risked overwhelming the health service within 21 days.

Most people must work from home and schools have closed for almost all pupils. Hospitality venues must stay shut, as well as non-essential shops.

Chancellor Rishi Sunak has previously announced emergency help for the economy worth £280 billion, including a massive job protection scheme that will run until the end of April.

Under Tuesday’s additional measures, retail, hospitality and leisure companies will be able to claim one-off grants worth up to £9,000 to get them through the coming months, costing up to £4 billion in total, along with £600 million of grants for other businesses.

“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,” Sunak said.

However, the British Chambers of Commerce said Sunak’s “drip-feed approach” to support for businesses would see many go to the wall as they would not qualify for sufficient assistance.

“While this immediate cashflow support for business is welcome, it is not going to be enough to save many firms,” BCC director general Adam Marshall said.

Britain suffered the most severe contraction of any Group of Seven economy in the second quarter of 2020 and the Organisation for Economic Cooperation and Development has estimated Britain’s recovery by the end of this year will be the slowest of all its member countries except Argentina.