Firms affected by reopening delay denied extra Treasury support

BUSINESSES affected by the four-week delay in the final reopening of lockdown in England will not get any new financial support from the Treasury, it has emerged.

From the start of next month companies will have to start contributing to the salaries of furloughed workers, despite the June 21 final reopening date being pushed back to July 19.

Hospitality, leisure and retail operators will also have to start paying a third of their business rates bill from the start of next month, ending more than a year of the bills being waived.

Protections from landlords demanding owed rent from business tenants and potentially evicting them if they cannot settle their debts also look set to expire next month as planned.

The refusal to offer new financial help defied calls from a host of business leaders who warned it could force pubs, restaurants and nightclubs out of business.

Treasury sources argued there were a host of financial support mechanisms still in place that were propping up the economy and could benefit affected businesses.

Around £1 billion is still available in discretionary funds run by local authorities which are designed to help firms affected by the pandemic, accessed through grant applications. A Treasury source noted that more than £65billion of taxpayer money had been spent on the furlough scheme, which covers the wages of affected workers, since the start of the coronavirus pandemic in March 2020.

“We need to keep a balance in order to ensure we can recover strongly,” the Treasury source said.

The Government currently covers 80 per cent of wages of workers in the furlough scheme. Next month that becomes 70 per cent, with employers having to cover the extra 10 per cent.

Jamie Stone MP, the chairman of the Gaps in Support All-party Parliamentary Group, said that failing to extend furlough support would punish businesses.

He said: “The furlough must be extended and additional support made available, in particular to the tourism, entertainment and hospitality sectors, who will have invested in stock which may now go to waste. Businesses should not be punished for the Government’s failures.” Dr Roger Barker, director of policy at the Institute of Directors, said: “Clearly this is a blow for many businesses, particularly those in the retail and hospitality sectors.

“We are now approaching a cliff edge, with government support for business ending or beginning to taper off. It is vital that this support is pushed out commensurately with the lockdown extension.

“Economic support and public health measures must be aligned.”

Michael Kill, chief executive of the Night Time Industries Association, said the delay could extend the debt burden of nightclubs.

He added: “We should not underestimate the importance of a June 21 reopening to these businesses, employees, entertainers and freelancers.”

But Treasury sources argued that the Government had been providing financial support at levels unseen since the Second World War and would have to rein back at some point.

A Treasury source said: “We are committed to helping businesses and individuals through the pandemic and we deliberately went long with our support to provide certainty way beyond the end of the road map to the end of September.

“This plan is working and strikes the right balance with the economy now beginning to grow as we reopen.”