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Businesses call for economic support alongside Covid restrictions

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
20/12/2021

The Federation of Small Businesses (FSB) has released a 10-point plan of options for economic support it says the government should consider as Covid restrictions take their toll, and amid speculation about further measures.

The list includes necessary steps to support sectors such as hospitality which are already bearing the brunt of lost trade. Other options will help small businesses as a whole continue to function through the New Year and into the Spring.

The FSB is calling for 100% Business Rates relief for eligible retail and hospitality businesses, as well as a cut in VAT to 5% for tourism and hospitality. It says these sectors have already been hit hard by the cumulative effects of working-from-home guidance, cancelled Christmas parties and some customers choosing to reduce outside contact before Christmas.

The FSB says those in supply chains to these sectors should also be supported, including through unlocking funds from the Business Rates Relief Fund, which was announced in March but is still not up and running.

The FSB’s proposals also include reinstating the Statutory Sick Pay (SSP) rebate, a VAT deferral, the reintroduction of the Jobs Retention Bonus, and a Hardship Fund in England to match similar support in Scotland and Wales.

Mike Cherry, FSB national chairman, said: “It is incumbent on ministers to consider an economic plan at the same time as it publicly debates further health restrictions. At the very least, government should already be reducing the fixed tax burden levelled on businesses when it is actively attempting to reduce social contacts – if more onerous measures are being considered, then it is essential to consider more comprehensive support for businesses and jobs at the same time, such as re-introducing the Jobs Retention Bonus.

“In hospitality, we’re hearing of dire examples from our members of cancellations and no-shows on a vast scale, stock having to be thrown away, and staff hours reduced. This, in turn, is hammering firms in the supply chains of these businesses. Failure to introduce business support to match the scale of public health restrictions will be damaging to the economy, jobs and communities.”

The list of options proposed for consideration by the FSB are:

* Increase the 2021/22 66% business rates relief for eligible retail and hospitality businesses to 100%

* Release the £1.5bn Business Rates Relief Fund to help supply chains

* Reinstate the Covid SSP rebate for all SME employers

* Re-introduce the Jobs Retention Bonus

* Reduce employer national insurance

* Reduce VAT in tourism and hospitality

* Introduce a ventilation grant scheme to assist small businesses in making their premises COVID-secure for the long term.

* Introduce a hardship fund in line with Scotland and Wales, and speed up local authority delivery of grants.

* Defer quarterly VAT payments accrued from trading in this quarter

* Give proper breathing space to businesses struggling with Covid debt