December 10, 2021

The Chancellor was warned today of the looming damage to the economic recovery if Government does not have to advance support for businesses following the Plan B Covid restrictions announced on Tuesday.

The warning came in a letter dispatched to the chancellor this morning, co-signed by Managing Director of the British Chambers of Commerce, Shevaun Haviland, and president of the BCC, Baroness Ruby Mcgregor-Smith CBE.

In the letter Mrs. Haviland and Baroness Mcgregor-Smith together the concerns of the BCC that the the full impact of current restrictions on business has not been compensated by all fresh Support. They statisticale that the BCC is very concerned about the possibility knock on effects of ‘Plan B’ policies and Has received reports from members of the hospitality industry on parties and events being canceled despite the current rules not requiring it.

They wrote “Consumer-focused service companies, such as retail and hospitality and those in their supply chains, are most exposed to the new measures as they arise during the critical Christmas season, when these businesses rely on consumers’ willingness to interact and spend (and is often vital to maintaining their cash flow before generally quieter months). Businesses in city centers that depend on footfall by people working in offices will also be hit hard by the new measures. “

Based on this they or they urged the Chancellor to consider the BCC’s decision proposals for a series of policy measures that could be put in place to ease the pressure on those most affected companies, including reduce VAT for hospitality and tourism to its emergency rate of 5%, restore 100% commercial tariff relief for retail and make additional subsidies availablee.

Shevaun Haviland, Managing Director of UK Chambers of Commerce, said:

“We wrote to the Chancellor today because we know talk to businesses across the country that the Treasury must absolutely act this matter if we are to maintain the strength of our economic recovery. We have presented a set of policy proposals that are practical, target and commensurate at the level of impact these restrictions will have on businesses.

“It is simply not enough for the government to say at this stage this enough support has been provided and leave it there. These restrictions will be have the the biggest impact on some of the companies, like hospitality, events and retail, who have been hit the hardest throughout this pandemic. They stretched all the tendons to get to this point but now faced with paralysis during this crucial festive time without fault on their part. “

  • The complete list of support measures proposed by the BCC are as follows –
  1. Restore VAT for hotels and tourism return to its emergency rate of 5%.
  1. Restore 100% reduction in retail business rates to give businesses the financial leeway they need to get through this difficult period.
  1. Make additional grants available which can then be administered locally and distributed as needed. This additional support should be provided regardless of whether or not the business is the direct taxpayer.

If tighter, or more durable, restrictions are needed (for example move to plan C) the government should remain open to increasing grant funding and re-establishing other supports, including:

  1. Reintroduce leave (including flexible-leave) for the sectors most exposed to the new measures until the end of March 2022 at pre-July 2021 levels (companies pay employees on leave 80% of their salary, up to a cap of £ 2,500 per month for time spent on leave).
  1. Additional support for businesses that have used government loan and tax deferral programs. The focus should be on new easements to support those who have already taken out loans and other debts that now need to be repaid. This should include providing better support to CBILS clients and raising awareness of the Pay as you grow program for BBLS clients. The HMRC with preferential insolvency creditor status should also describe the steps it will take to support businesses at risk of bankruptcy.

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