Covid restrictions could make it almost impossible to lower taxes

After growing calls from retail and hospitality for financial support to weather the ‘unofficial lockdown’ plaguing these industries, the Treasury today has responded. After a week of conversations with business leaders, Chancellor Rishi Sunak has announced a £1 billion support package this afternoon, which includes one-off grants worth up to £6,000 for hospitality and leisure businesses in England, as well as government cover of Statutory Sick Pay for workers off with Covid-related illness, which can be claimed by small and medium-sized firms.

Sunak’s decision to deliver a support scheme isn’t all that surprising, given the Chancellor’s generous track record with these packages in the past. While businesses legally remain open, Boris Johnson’s repeated push for the public to modify their behaviour (echoed by other members of the Cabinet and government officials across the airwaves), has seen a fall in mobility trends (especially in areas like London, where Omicron is especially prevalent) while restaurant reservations also show a notable drop-off in activity.

This guidance was on display yet again in a video published on the Prime Minister’s Twitter feed this evening, where he confirmed Christmas festivities could go ahead as planned, but urged ‘everyone to exercise caution, to keep protecting yourselves and your loved ones, especially the vulnerable.’