Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of local authorities distributing discretionary grants based on a business’ number of employees rather than its non-domestic rates.

The Local Restrictions Support Grant (Closed) and the Local Restrictions Support Grant (Open) have been tied to the business rates system because these schemes are intended to support businesses which face high fixed property-related costs, such as rent. Rateable values are a proxy for annual rent.

The LRSG (Closed) grants, which are available to businesses in England which are legally required to close, cover in full the assumed monthly rents of nearly 90% of all small and medium retail, hospitality and leisure businesses in England. Businesses can receive up to £3,000 per month from this scheme, depending on their rateable value.

The LRSG (Open) grants, operating in England, are worth 70% of the value of the LRSG (Closed) grants, in recognition of the fact that hospitality, leisure and accommodation businesses which are able to remain open but which are located in areas subject to restrictions on socialising (in particular a ban on household mixing), are likely to suffer a significant reduction in demand. Local authorities which were subject to these restrictions between 1 August and 5 November received additional funding to make backdated grants to hospitality, leisure and accommodation businesses, in recognition of the severe reduction in demand which they likely faced over that period.

Through the Additional Restrictions Grant, English local authorities have received additional funding for business support worth £20 per head of population, a total of £1.1 billion across England. This funding is intended to complement the Local Restrictions Support Grant schemes. It will be up to local authorities to distribute the ARG funding, and they have the discretion to make grants to businesses outside of the business rates system.

Eligible businesses across the UK can claim for the CJRS for their furloughed employees – including in Scotland – enabling them to support employees during this difficult time. This complements the grant funding in England which is intended to help with fixed costs.