UK Government Announces $6.2 Billion Grant Scheme for Lockdown-Hit Businesses

UK Government Announces $6.2 Billion Grant Scheme for Lockdown-Hit Businesses

London’s Covent Garden Market, normally crowded with tourists and shoppers, was deserted on April 4. Getty Images

Britain on Tuesday offered a £4.6 billion ($6.2 billion) support package for businesses struggling to cope with a third national lockdown, imposed this week to stem a new wave of Covid-19 cases sweeping the country.

Finance minister Rishi Sunak said retail, hospitality and leisure companies will be able to claim one-off grants worth up to £9,000 to get them through the coming months — adding to hundreds of billions of pounds of existing support.

Prime Minister Boris Johnson announced the lockdown late on Monday saying a highly contagious new coronavirus variant first identified in Britain was spreading so fast it risked overwhelming the National Health Service (NHS) within 21 days.

“This will help businesses to get through the months ahead — and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen,” Sunak said.

Under the new lockdown, people are instructed to work from home unless it is impossible for them to do so. All hospitality venues must remain closed as well as non-essential shops. Organised sports, both indoors and outdoors, are cancelled except for elite competitions.

In addition to the UK-wide grants, worth around £4 billion, the government will provide £594 million of funding to the administrations of Scotland, Wales and Northern Ireland.

Sunak said in November that measures taken to that point to help the economy through the pandemic would cost about £280 billion this financial year.

“This new grant package is welcome, and will go some way to reassuring the worst affected businesses,” said Roger Barker, director of policy at the Institute of Directors business group.

Britain suffered the most severe contraction of any Group of Seven economy in the second quarter of 2020, when the country was hit by its first lockdown, with output down by almost 20 percent.

The Organisation for Economic Development and Coordination has estimated that Britain’s recovery by the end of this year will be the slowest of all its member countries except for Argentina.

By Andy Bruce; editors: Guy Faulconbridge and John Stonestreet.

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