Government urged to increase support for retail firms after EU State Aid rule changes
The government has been urged to increase the financial support available to retail and hospitality businesses after the European Commission confirmed that the UK is able to apply a revised state aid framework.
The EU said earlier this week that the UK can implement the revised Covid-19 State Aid Temporary Framework, which increased the limit from €800,000 per company over three years, to €3m.
Due to previous restrictions, larger retailers were unable to claim enough relief to keep stores mothballed and prevent long term job losses, business rates experts at property consultancy Colliers International said.
The new framework allows aid to be granted to businesses that suffered a decline in turnover between 1 March 2020 and 31 December 2020 of at least 30 per cent compared to the same period in 2019.
Companies that apply for financial help need to give detailed accounts of their losses, and aid should not exceed €3m per business.
Colliers has called on the government to allow properties with a rateable value of less than £15,000 to receive a grant of £10,000 per site.
Under Colliers’ proposed changes, premises with a rateable value over £15,000 could receive £25,000 per property
It suggested that the grants could be funded by money left over from the original grant scheme and the windfall after supermarkets repaid more than £2bn in business rates.
John Webber, head of business rates at Colliers, said: “The current government grant schemes have become complicated, particularly when combined with regional variations depending where you live in the country- adding to confusion and red tape.
“Whilst we support the Government in creating grant schemes and are relieved that the limits to receive State Aid have been increased, we campaign for simplicity and immediate help now.
“We hope the lifting of State Aid rules has not come too late for many hard-pressed retail and hospitality businesses, who may have already made difficult decisions over closing stores and jobs. With the latest news about London entering Tier 3, there is no time to lose if we want to see such businesses survive into the New Year.”