Harrogate businesses' mixed reaction to Rishi Sunak's new £1bn Covid support

Chancellor Rishi Sunak finally bowed to the inevitable yesterday in the face of the Omicron variant by announcing a new economic support package - but it has received only limited support from Harrogate businesses.

By Graham Chalmers
Wednesday, 22nd December 2021, 9:02 am
Harrogate BID Manager Matthew Chapman said: “The Government's Plan B and growing concerns over the Omicron variant has had a massive impact on business".
Harrogate BID Manager Matthew Chapman said: “The Government's Plan B and growing concerns over the Omicron variant has had a massive impact on business".

Mr Sunak’s new £1bn fund announced on Tuesday to help businesses hit by the rise in Covid cases is being targeted at the leisure and hospitality sector, in particular.

Premises hit by a wave of cancellations in response to continuing speculation that tougher restrictions may be on the way to combat the surge in Covid can now apply for grants of up to £6,000 each.

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But Harrogate Business Improvement District (BID) says it is still backing a new nationwide campaign to persuade the Government that the economic recovery remains in jeopardy and a lot more needs to be done.

More than 100 UK town and city centre organisations, including Harrogate BID, have joined forces with the British Beer and Pub Association and Night Time Industries Association to call on the Prime Minister to offer greater assistance not just over Christmas but in the months ahead .

Harrogate BID Manager Matthew Chapman said: “Plan B and growing concerns over the Omicron variant has had a massive impact on business, in particular those in hospitality and leisure.

“For many it is the nightmare before Christmas, and we are backing this campaign as without financial support, some businesses will not survive the next few months.”

Among the measures they believe are essential if the economy is not to falter in 2022 are:

Business Rates Relief:

Provide businesses in the retail, hospitality and leisure sectors with 100% Business Rate Relief for up to and including March 31, 2022, followed by a 50% Business Rate Relief from April 1, 2022 to June 3, 2022.

The new campaign argues that the current package of 25 per cent Business Rate Relief was designed for an open economy, post Covid.

The rise of the Omicron variant, increased restrictions and their impact on hospitality, leisure and retail require a response from Government that mirrors lockdown support.

VAT extension:

Extend the current VAT reduction for the hospitality sector of 12.5% through to March 31, 2023.

The new campaign argues that the current rate of 12.5 per cent allows businesses to achieve cost savings and - most importantly of all for the economy and consumer confidence - not to pass the increased cost on allowing for the economy to recover once more in Spring 2022.

Provide grants:

Introduce grants up to £15,000 by rateable value to businesses in hospitality, retail and leisure.

The new campaign argues that this would enable the hospitality sector to survive in light of a festive trading period in tatters, a bleak outlook for the new Year and the impending rent quarter date of 25 December 2021.

For Harrogate BID, Mr Chapman said the scale of the economic threat faced, now required a stronger response than currently being offered.

“It’s great that the Chancellor has announced a package of financial support but I’m not sure the size of the grants being offered will go very far,” he said.

“What he needs to do is review this figure, and also look seriously at the other areas that have been highlighted.”

Helping hospitality sector? What's in Chancellor's new package of business support measures

Chancellor Rishi Sunak’s £1bn package of economic support which was unveiled on Tuesday includes:

A total of £683m will be made available from existing council-run schemes for restaurants, bars, cinemas and theatres which can apply for a grant of up to £6,000 for each of their premises;

Non-leisure and hospitality sector businesses can apply to local councils for a different grant under the Additional Restrictions Grant, which has been boosted by an extra £102m;

A Statutory Sick Pay Rebate Scheme is being reintroduced for business with fewer than 250 employees to claim money to cover sick pay for employees who are affected by the virus;

An extra £30m for arts organisations such as theatres and museums will be made available through the Government’s existing Culture Recovery Fund.