Business leaders say vaccine rollout is ‘our path out’ of high unemployment

Business leaders have said they will be putting pressure on the Government to deliver vaccine promises in order to limit the economic damage of the latest national lockdowns.

The Prime Minister has laid out plans to vaccinate 13 million of the most vulnerable people by mid-February, which he said could enable restrictions to be progressively eased from next month.

Neil Carberry, chief executive of the Recruitment and Employment Confederation, said there are “lots of reasons to worry about where we are right now”, but the vaccine programme is among the strongest “reasons for optimism” that unemployment levels could ease later this year.

He said: “Unemployment at 7% is a big problem.

“But we can see the finish line now. It’s why the vaccination programme has to be our number one priority, that’s our path out.

“I think a lot of pressure from the business community will actually focus on the Government delivering its vaccine promises over the next few weeks.”

Chancellor Rishi Sunak also announced on Tuesday that around 600,000 retail, hospitality and leisure sites will be able to claim a one-off grant of up to £9,000.

Mr Carberry said this package is “of course welcome” but “falls short in a couple of key ways” because like financial support during the March lockdown, it is “aimed at those businesses the Government has specifically required to close” while overlooking their suppliers who are facing “severe cash flow challenges”.

“A more comprehensive package is going to be needed to support businesses through this,” he said.

“Businesses are looking for a long-term strategy… not just how do we step back from the furlough scheme as lockdowns ease, but what sort of support is necessary to get firms hiring again.”

He added that easing national insurance payments for employers with furloughed staff, particularly those in the hospitality industry, will help preserve jobs.

Kate Nicholls, chief executive of trade group UKHospitality agreed that the grant support is “not enough”.

She said: “While this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector.

Tom Ironside, director of business and regulation at the British Retail Consortium, said retailers are losing £2 billion each week and therefore “such grants are unlikely to be enough to protect otherwise viable firms from going bust, costing shops and jobs”.

“The key policy Government should implement is to extend business rates relief from April for those hardest hit by repeated lockdowns,” he said.

The programme of grants will cost the Treasury £4.6 billion and is aimed to help support the high street as new lockdown measures announced on Monday take hold.

Mr Sunak also announced a further £594 million for local authorities and devolved administrations to support businesses not eligible for the grants.

The Scottish Government will receive £375 million, the Welsh Government £227 million and the Northern Ireland Executive £127 million.

The latest payments will be based on the size of each store, pub, cafe or hotel tied into the business rates typically paid by each business. The smallest sites will be able to claim up to £4,000 and medium-sized ones £6,000.