Covid: Chancellor Rishi Sunak rules out extra financial support despite four-week delay to June 21 unlocking in England

Credit: PA

There are howls of dismay from airports, airlines, tour operators, pubs, hotels, bars, restaurants, theatres and cinemas for whom the delayed lifting of England's restrictions is a significant setback. The Treasury has been inundated with requests for extra financial support.

Business groups and the unions want the furlough scheme extended and made more generous.

Why has the Chancellor not offered more support?

There are calls for more VAT relief, more business rates relief and more cash grants.

The Confederation of British Industry wants bespoke bail out package for travel sector. The Trades Union Congress wants the same for the hospitality. But the chancellor, Rishi Sunak, believes there’s enough support on the table.

On Monday night, a Treasury spokesperson said: “We are committed to helping businesses and individuals through the pandemic and deliberately went long with our support [in the Budget] to provide certainty over the coming months”. The evidence from January, February and March is that households and businesses adapted well to lockdown measures.

Spending held up and then surged when restrictions began to lift in earnest from April. Last month, the Bank of England said it thought that the economy would get back to its pre-crisis size before the end of the year.

The delay to reopening probably won’t materially change that assessment.

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The risk though is that there will be some businesses who are so depleted they can’t make the final extra yards. There are around 2.5 million people still furloughed. The Bank of England thought the “majority” of them would be able to return to work. The chancellor is betting that, despite the four week extension to the restrictions, activity will still come back strong enough to catch people as furlough support unwinds. Let’s hope he’s right.