Industry leaders have welcomed many of the measures in the Chancellor’s Budget to help small businesses through the coronavirus crisis.
But aviation bodies expressed frustration at the lack of support for airlines.
Chancellor Rishi Sunak announced a £30 billion package of measures to counter the Covid-19 epidemic, including £2 billion in funds to support small businesses.
These include refunds of up to 14-days statutory sick pay for absences due to the coronavirus for businesses with fewer than 250 employees, a year-long suspension of business rates and a ‘business interruption loan’ scheme.
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Abta calls for coronavirus support
Abta had called on the government to support the travel and tourism industry this week, saying: “Travel businesses are under increasing pressure.”
Chief executive Mark Tanzer said: “The new Chancellor has acted quickly and decisively with measures that will support smaller businesses.”
The Bank of England cut interest rates on the morning of the Budget and Tanzer said: “The business interruption loan scheme, the emergency cut to interest rates and support for small businesses with sickness payments for staff will provide some welcome relief and a degree of protection in the weeks to come.”
However, he said: “The measures designed to increase access to short-term credit need to be turned into reality. The government must work with lenders to ensure the measures are effective.”
Hospitality on ‘front line of coronavirus impact’
Kate Nicholls, chief executive of hospitality association UKHospitality, said: “Hospitality businesses are on the front line of coronavirus impacts and need support as footfall and bookings drop, people self-isolate and serious cashflow problems arise.”
Nicholls said: “Easing business rate burdens and partial refunding of statutory sick pay will help support some businesses.”
But she added: “It’s vital to recognise larger operators, which have been utterly ignored at a time of business crisis.”
Nicholls also noted: “Punishing payments [are] still expected of companies whose venues may not be able to open or operate.”
The government announced an autumn deadline for a review of the business rates system and Nicholls said: “It’s a positive step that the government acknowledges the system requires improving.”
UKinbound chief executive Joss Croft said: “Over the last few weeks, my association has been receiving increasing numbers of calls from members desperately worried about their businesses, which have been severely impacted by Covid-19.
“Specifically, some of our members have told us that their only option now to ensure the viability of their businesses, is financial support from the government.
“At first glance, the chancellor’s Budget will come as a relief for many tourism and hospitality businesses, with its package of measures and support to mitigate the impact of the virus.
“We particularly welcome the business interruption loan scheme and deferment of tax payments. Business rate relief for small businesses with a rateable value under £51k and a review of business rates are also to be welcomed.
“However, the government needs to recognise that businesses that do not qualify for this support will also suffer, as this rate relief does not go far enough.
“Speed is of the essence here in making this support accessible to the industry, as some businesses may only have a few weeks left to survive.”
Airlines voice coronavirus disappointment
Airline associations were less welcoming.
Dale Keller, chief executive of the UK Board of Airline Representatives (BAR UK) said: “The Chancellor’s Budget speech made no mention of any support measures for the aviation sector despite airlines being uniquely impacted by the COVID-19 crisis.”
Airlines UK chief executive of Airlines UK Tim Alderslade described the Budget as “disappointing” and noted “the complete lack of support for the sector’s net-zero carbon strategy”.
Aviation leaders had urged the Chancellor to offer incentives for investment in new technologies including sustainable aviation fuels and electric-powered flight.
Alderslade said: “UK aviation has committed to net zero emissions by 2050, but this will not happen without the right policy levers from government encouraging new technologies and innovation.”
Budget fuel duty freeze
Among other Budget measures, the Chancellor froze fuel duty for another year despite having been expected to increase the tax on petrol.
However, he made clear the government’s intention to raise taxes on pollution and announced the introduction of a plastic packaging tax from April 2022.
The government will also legislate to introduce a UK Emissions Trading System (ETS) from January 2021, which will link to the existing EU ETS.
The Chancellor confirmed introduction of a Digital Service Tax from the start of April which will levy 2% of the UK revenue of digital businesses such as Google and Facebook.
The Treasury said: “This will ensure the amount of tax paid in the UK reflects the value these businesses derive from their interactions.”