UK Removes EU Cap On Covid Grants For Struggling Businesses

The government has tripled the size limit of Covid-19 grants accessible to businesses after being criticized for complying with EU state aid regulations months after the end of the Brexit transition period. The UK was still applying temporary EU measures and was locked out of the £ 4.6 billion emergency coronavirus grant announced in January.

Last year, subject to the Brexit transition period, which expired at the end of December, the UK government signed the European Commission’s “Temporary Framework for State Assistance”, with individual companies each granting more than € 4 million. I restricted the receipt. Covid-19 in crisis.

The state aid cap on government grants has now been raised to £10.9m, meaning larger hospitality groups will be able to gain access to more support.

Business minster Paul Scully, whose responsibility includes restaurants and pubs, announced the move saying: “We continue to back businesses of all sizes through the pandemic and I’m delighted to see the cap on Covid-19 support grants raised to £10.9m.

“Extending our support will help retail and hospitality chains and the thousands of staff they employ.

Commenting on the increase, Kate Nicholls, CEO, UKHospitality today said:

“The increase in the value of subsidies permitted to businesses is a positive move by Government and will allow more businesses to access the grants that they so desperately need. While this cut-off means that some businesses will continue to miss out on parts of the funding that Government has announced, it is a big step forward and provides certainty for business. This increase must be communicated to local authorities urgently to ensure that funds are paid out. Government could go further and explore uncapped grants in respect to Covid-19 in line with EU subsidy rules.

“The Business Secretary has rightly recognised that these companies are significant employers and that 230,000 people’s jobs were potentially at risk if this emergency funding has not been provided.

“Government must now look urgently at the arbitrary £2 million cap imposed on business rates relief in Wednesday’s Budget. This will see many mid-sized businesses facing full rates bills in July, just days after reopening. This limit on support for hard-pressed hospitality businesses is deeply damaging and could threaten the survival of jobs and businesses in the sector, as mid-sized companies are forced to prioritise paying tax over paying wages. We urge Government to take the same pragmatic and sensible approach to rates relief as with subsidies and review their approach on business rates support.”