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‘Emergency virus funds fail to reach small businesses’

The Treasury’s one-size-fits-all approach has meant that only 14 per cent of Westminster-based firms on the business rates rating list are estimated to be eligible to receive grants from the two main schemes, says Labour’s Murad Qureshi

01 September, 2020 — By Murad Qureshi

Murad Qureshi, a Labour Assembly Member for Greater London, at a Cabmen’s Shelter

IT has been reported that some central London small business owners are missing out on vital government funding as emergency grants intended to keep struggling firms afloat are being handled, but then kept, by their landlords.

A specific example lies in the historic Cabmen’s Shelters dotted across the West End.

I have recently spoken to some of the proprietors of these quaint and distinctive green boxes, which still operate as cafés 150 years on.

A few of the operators have raised concerns that since lockdown began, they still have not had sight of any government grant that should have passed on to them by the shelters’ trustees.

This has sparked me to investigate the issue further and I have now obtained confirmation from Westminster City Council that the Cabmen’s Shelter Fund did, indeed, receive a share of emergency funding from the Treasury.

With the wider picture of small businesses continuing to be placed under mounting pressures, as we head into a deep recession, these trustees now have a responsibility to explain to their tenants why they have chosen not to hand down this grant.

This is not the only problem with the government’s current programme of Covid-19 related support for businesses.

The Treasury’s one-size-fits-all approach has meant that only 14 per cent of Westminster-based firms on the business rates rating list are estimated to be eligible to receive grants from the two main schemes: the Small Business Rate Relief grant and Retail, Hospitality and Leisure grant.

This is all down to the restrictions that the chancellor Rishi Sunak has set for accessing these schemes.

Many small to medium size enterprises (SMEs), in the capital will be ineligible for these grants as they have a rateable value which exceeds a certain threshold.

However this does not mean that they do not need urgent financial help after being badly impacted by a loss of footfall and cashflow.

I have lobbied the government to be more flexible with the rules to reflect this, but this has so far been met with a short-sighted refusal.

We also need urgently to address the fact that the current grants system prohibits applications from small firms that operate from premises where their landlord is in charge of handling business rate charges and relief claims on their behalf.

Another case in point is Normah’s Malaysian restaurant in Bayswater.

They have been left very confused by the whole process and have implored the government to find a way to support the small businesses who are being left to fall through the gaps.

If the government fail to act, for thousands of SMEs, it will no longer be a case of maximising profits, but fighting tooth and nail for survival.

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