I remember budget day last 11 March. I listened to Sunak in the Radio 2 studio and went on air to tell Jeremy Vine that I thought Sunak had utterly misunderstood the spread of coronavirus and that the impact would cost much more than the £60 billion he had allocated to deal with the crisis. How right I was.
Today Sunak has announced £4.6 billion of support for businesses impacted by the latest lockdown. The deal according to the Treasury is:
- Chancellor announces one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through to the Spring
- £594 million discretionary fund also made available to support other impacted businesses
- comes in addition to £1.1 billion further discretionary grant funding for Local Authorities, Local Restriction Support Grants worth up to £3,000 a month and extension of furlough scheme
The detail says:
- the one-off top-ups will be granted to closed businesses as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
- business support is a devolved policy and therefore the responsibility of the devolved administrations, which will receive additional funding as a result of these announcements in the usual manner:
- the Scottish Government will receive £375 million
- the Welsh Government will receive £227 million
- the Northern Ireland Executive will receive £127 million.
So let's appraise that.
First, not all businesses impacted are in the retail, hospitality and leisure sectors. Many will be in their supply chains, for a start. For them there is nothing.
Second, all the old gaps - including many new self employments and contracting businesses - still fall through the cracks.
Third, the sums involved are for many impacted businesses quite tiny and inconsequential.
Fourth, there is nothing to alleviate cash flow strain when many of these grants will take considerable time to reach businesses but cash flow loss is immediate.
Fifth, there is no awareness of the other burdens government imposes - so for example the tax return deadline remains fixed despite this new crisis and all the problems it will impose.
Sixth, nothing in here suggests a policy and everything still suggests a sticking plaster.
Sticking plasters were fine last March - and Sunak eventually found them. But they are no longer fine. What we need is long term business support as part of a new industrial strategy now - and it's unforgivable that none has emerged as yet.
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I agree….. particularly with your last paragraph
Whether it be disease control or financial support there are three common themes
1) underestimation of the problems.
To be fair, this was a common failing but our government has been particularly poor at recognising was was happening as the facts on the ground here and elsewhere became apparent.
2) believing that the sticking plaster (first lockdown and furlough) was the cure
Lockdown was only ever going to deliver time to plan a better solution. COVID is like a car on a hill – if you take your foot off the brake it will pick up speed and however slow you started it will get very fast soon enough. For some bizarre reason our government decided that once the level of disease was low we could “eat out to help out”. Lockdown was there to give time to create a good track/trace and isolate system and the government failed badly.
3) focus on “how will I look?” rather than what needs to be done.
Vanity – pure vanity.
They are still banking on the vaccine aren’t they?
Because they want to claw any money back and get on with austerity and hiding the effects of BREXIT.
“First, not all businesses impacted are in the retail, hospitality and leisure sectors…. For them there is nothing.”
£594 million discretionary fund also made available to support other impacted businesses
Forensic analysis.
That’s an average of £108 per business
That is forensic analysis
You’ve divided £594m by 5.5m
Based on what, exactly?
The number of approximate self-employed businesses plus the number of trading companies
Of course it is approximate
But it shows how absurd the claim was
lol – the drunken cowboy trying to shoot at the side of the barn and missing again act continues. Amusing all the watchers who aren’t taking cover from his stray bullets so they can’t see his gang printing and removing zillions from the Mint and Treasury. Throwing a bunch of the wet notes in the air for people to be further distracted and in their greed to get some and devil take the hindmost , beggar their neighbour mentality.
As you noted elsewhere on your blog Richard (another tremendously helpful to me, post you made, ta for that) what has become clear is that HMG won’t act and do what is required until it feels no other choice – e.g. the primary schools debacle just being the latest chaotic farcical example.
Jon Ashton (here: https://www.youtube.com/watch?v=OzvhVq3qdNk&ab_channel=DoubleDownNews) made that point (HMG cannot be trusted to do what they are eventually forced to do) on 1st Dec – listen from 5m18s onwards) that henceforwards ‘we’ have to use our common sense and ‘we’ have to do it now as HMG won’t.
Consequently I’m now arguing at my HEI that it must implement, in conjunction with PHE or it’s successor, a test track and trace system (as that is the only way out of this mess – China, Vietnam, New Zealand South Korea have shoen the way) and that in addtion, our VC and senior bods, must now also be arguing within UUK (Universities UK) for UUK to put pressure on HMG to change the funding model for HEI’s as that too is now utterly broken, having seen fit to built a model that was dependent on charging overseas students a lot more than national students….
Am I optimistic?
Their track record so far isn’t promising (and I mean our VC, UUK and HMG don’t hold a lot of hope) and as you ahve also noted Richard, it’s time for change.
Well – of all people – Andy Burnham has just mentioned the self-employed on this evening’s news.
Yay!
Sunak would seem to be the lead Cabinet member resisting lockdown for all the reasons that have been gone through here before. As such he is directly accountable for the surge in COVID cases and the resulting casualties.
His ‘Dishi Rishi’ image should be seriously tarnished. Its not just his economic policies that have failed
He was also the strongest supporter of bringing in supporters of the dire libertarian Great Barrington Declaration – who have a lot to answer for
If one follows the reasoning in Alastair Campbell’s recent piece about those behind Brexit and the rest of the governments right wing policies, Sunak looks like the perfect successor to Johnson in their eyes. He’ll be shuffled off stage and back to his £250k sinecure at the Torygraph
Johnson has finally made a pledge that all people in the top 4 priority groups – 13 million people will get the vaccine by “the middle of February”. How much can we rely on this pledge to “solve” our problem when all pledges made since March 2020 were not met? They have not explained how in 6 weeks they can do 2 million a week when the rate is barely 1 million now.The recent £4 billion measures are a drop in the ocean unless the virus is fully under control, any thought of returning back to normal economics soon is pie in the sky. As before, additional rushed measures will have to be brought in before any new budget in March 2021 is produced.
That pledge is believed by no one
Hi Richard, just discovered your info whilst googling how BOE raise money and repay it. Pardon my ignorance as a retired banker but I can’t understand the Chancellors reticence in providing more funds to businesses to survive void disaster. As the money is borrowed from BOE which is in effect the government which is us the populace, why can’t billions be created and then subsequently written off to ourselves. Obviously some constraints are necessary . Every government in the world has the same dilemna. Why should future generations be taxed as a result of hopefully a one off catastrope. Maybe I’m off on a tangent here but I can’t find anyone to rationalise government finance in layman’s terms. Thank you
He does not understand what you do now understand
Further to Robin Stafford above, here is the link to Alastair Campbell’s post – which I find both frightening and exactly what I have feared and suspected.
ET voici, tardivement, le lien
https://alastaircampbell.org/2020/12/the-brexit-revolutionaries-have-barely-begun-britain-needs-to-wake-up-fast/
sorry for the delay