Chancellor Rishi Sunak’s latest measures to protect business and livelihoods from the Omicron-Covid surge are just a ‘first step’ towards what’s needed this winter.
Progressive think tank the Institute for Public Policy Research, called for further action to “limit the financial toll of Omicron, save jobs and prevent a cost-of-living crisis”.
While welcoming Sunak’s initiative broadly, not enough was being done on statutory sick pay in particular, it said.
Dr George Dibb, head of IPPR’s Centre for Economic Justice, said: “The chancellor has subsidised the cost of sick pay to businesses but not shifted the incentives to make self-isolating financially sustainable for many people. Sunak should urgently increase the level of sick pay and expand eligibility so more people can claim it. Additionally, we support putting in place a new furlough scheme and supporting the worst-off with a Universal Credit boost.
Dibb added: “This wave of Covid-19 is happening just as inflation and price spikes are causing a cost-of-living crisis. It’s not sufficient to just support businesses through this crisis, further measures to support people’s incomes are needed. Without action now those on low incomes are being left out in the cold this winter.”
Restrictions at work
The Institute of Directors was more guarded over the announcement: Dr Roger Barker, director of policy, said: “The government has responded to industry representations and this targeted support package will be welcome relief to many businesses. These measures will go some way to protect and compensate those most adversely affected.
“However, with the unwinding of a number of remaining support schemes at the end of Q1 2022, such as the VAT reduction for hospitality and business rates support, businesses also need the reassurance that these measures will now last for longer into 2022.”
Kate Nicholls, UKHospitality CEO, said: “This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated.
“It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines.
Sunak should urgently increase the level of sick pay and expand eligibility so more people can claim it” – George Dibb, IPPR
“It is a generous top-up emergency fund in addition to previous support and with a commitment from ministers to prioritise hospitality and its supply chain in allocation of funds. There is now a real urgency in getting this funding to businesses so we urge local authorities to prioritise distribution of funds to make sure jobs and businesses are preserved through this difficult period.”
Under Sunak’s scheme, cash grants of up to £6,000 per premises can be awarded to each eligible firm.
Mark Lewis, chief executive of charity Hospitality Action tweeted: “£6k … does that touch the sides?” One reply, from Wiltshire pub-restaurant the Longs Arms read: “Up to £6,000 so that’s clearly not great. Even if we got the full amount, which we won’t, it’s still a struggle.”
Some restaurant and bar operators did not agree that the funding was in anyway generous, pointing out that most firms would not receive £6,000 and even then it would not approach the losses being made.
Nicholls responded: “I fully appreciate that this can never be enough to compensate for the loss of December but we are continuing to work to secure additional support if there are restrictions and to secure recovery. We asked for more and I tried my hardest.”
Labour’s shadow chief secretary to the Treasury Pat McFadden MP said the support added up to a “holding package”.
“The prime minister is a prisoner of divisions inside his party and within the Cabinet about whether any further measures are needed and whether they will get past Tory backbenchers. That is not the way that crucial public health decisions should be taken,” he said.
“Business support should have been announced when the Plan B changes were voted on last week but it has only happened after the chancellor was dragged back from California to focus on the plight facing businesses and workers here in the UK.”
The TUC urged the government to go further, calling for a return to state support for wages to help workers pay their bills amid a “lockdown by stealth”.