Queen's Speech 2021 - Support for Businesses

“My Government’s priority is to deliver a national recovery from the pandemic that makes the United Kingdom stronger, healthier and more prosperous than before...Following the unprecedented support provided to businesses during the pandemic, proposals will be brought forward to create and supportjobs...”

• Throughout the pandemic, the Government has protected jobs, livelihoods, businesses and public services across the UK through a £352 billion package of support; including cash grants, Government guaranteed loans, tax reliefs and employment support.

• Our Plan for Growth will ensure that we build back better after the pandemic. It will take a transformational approach, tackling long-term problems to deliver growth that creates high-quality jobs across the UK and makes the most of the strengths of the Union. We must retain our guiding focus on achieving the people’s priorities: levelling up the whole of the UK, supporting our transition to net zero, and supporting our vision for Global Britain.

  COVID-19 Business Support

  Business Loans

• Following the success of the emergency COVID-19 Government-guaranteed loan schemes, which closed in March 2021, the Government has introduced the Recovery Loan Scheme. This new 80 per cent guaranteed loan scheme is open to all businesses, including those who have already received support under the emergency schemes and it will support them, particularly small and medium­ sized enterprises, as they recover and grow following the disruption of the pandemic and the end of the Transition Period. The scheme is open to all businesses, including those who have already received support under the emergency schemes.

Restart Grants

• Over the course of the pandemic, the Government has provided up to £25 billion in cash grants to protect businesses, and the jobs they support.

• The Government is providing businesses with new Restart Grants, to give them the cash certainty they need to plan and safely relaunch trading over the coming months. Hospitality, accommodation, leisure, personal care and gym business premises in England are eligible for grants up to £18,000. Non-essential retail business premises in England are eligible to receive grants worth up to £6,000.

• The Government has also made over £2 billion of discretionary grant funding available for local authorities in England through the Additional Restrictions Grant to support businesses in their local area.

Value Added Tax (VAT) Reduced Rate for Hospitality and Tourism

• In July 2020 the Government cut the rate of VAT applied to goods and services in the hospitality, accommodation and attractions sector from 20 per cent to 5 per cent.

• To continue supporting the cash flow and viability of around 150,000 businesses, and the 2.4 million people they employ, the Government is extending the 5 per cent reduced rate of VAT affecting these sectors until 30 September 2021. To help those businesses manage the transition back to the standard rate, a new 12.5 per cent rate will apply from 1 October 2021 to 31 March 2022.

  VAT Deferral New Payment Scheme (NPS)

  • The Government announced the VAT deferral ‘New Payment Scheme’ in the Winter Economy Plan (published 24 September 2020), which is available to any business that took advantage of the original VAT deferral.

  • Instead of paying the full deferred VAT outstanding by 31 March 2021, businesses can spread what they owe over up to 11 smaller monthly payments. Businesses can join the service online without needing to contact HMRC. The service opened on 23 February 2021 and will close on 21 June 2021.

    Business Rates Measures

  • Eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief worth over £6 billion in 2021-22. This includes a three-month extension of the current 100 per cent business rates holiday from 1 April 2021 to 30 June 2021. This will be followed by 66 per cent relief for the period 1 July 2021 to 31 March 2022 for eligible properties, with a cap of £2 million for businesses that were required to close on 5 January 2020, and up to £105,000 relief for businesses that were permitted to open.

  • The Government has also announced a new £1.5 billion relief fund to be awarded to non-retail, hospitality and leisure properties most affected by COVID-19. The relief, which will be awarded by Local Authorities on a discretionary basis, will ensure support is available to those not within scope of the £16 billion of support already announced for eligible properties in the retail, hospitality and leisure sectors.

  • To further support businesses, the Government has also decided to freeze the business rates multiplier in 2021-22, saving businesses in England an estimated £575 million over the next five years.

COVID-19 Corporate Financing Facility (CCFF)

• The COVID-19 Corporate Financing Facility (CCFF) has provided £38 billion of support since 23 March 2020, directly supporting our largest firms responsible for 2.5 million UK jobs.

• The scheme closed for new issuance on 22 March 2021. The approved value refers to the total credit line for all 304 eligible firms, which peaked at c. £104 billion. The total issued into the scheme by 107 firms was around £38 billion.

  Culture Recovery Fund

• Key national and local cultural organisations will continue to benefit from the Culture Recovery Fund. £300 million additional funding will be made available in 2021-22 to support cultural organisations in England as audiences begin to return, on top of the £1.57 billion provided in 2020-21. In addition, the Government-sponsored National Museums and cultural bodies will receive a further £90 million of support in 2021-22.

Commercial rents

• Commercial tenants who cannot pay their rent because of COVID-19 are currently protected from eviction until 30 June 2021. This means no business will be forced out of their premises for not paying rent.

• The Government has also extended restrictions on statutory demands and winding-up petitions until 30 June 2021, which will protect companies from creditor enforcement action due to debts related to COVID-19.

  Plan For Growth - Investment-led Recovery

• As well as addressing the immediate challenges of the pandemic, the Government is acting now to lay the foundations for a recovery driven by the private sector that spreads investment and opportunity throughout the UK, by helping businesses to grow, and improving access to skills, capital and ideas.

Plant and Machinery Super-Deduction

• The super-deduction is the biggest two-year business tax cut in modern British history - supporting British enterprise in leading us to the post-pandemic economic recovery.

• From April 2021 until the end of March 2023, companies can claim 130 per cent capital allowances on qualifying plant and machinery investments. Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p.

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Help to Grow Scheme

• The Government’s new ‘Help to Grow’ scheme will help small businesses across the UK learn new skills, reach new customers and boost profits. Eligible small businesses could get:

o An Executive Development programme to help them improve business performance and growth potential.

o Free online advice and money off software to help them save time and cut costs.

Future Fund: Breakthrough

• The £375 million, UK-wide ‘Future Fund: Breakthrough’ scheme will target innovative, R&D-intensive firms and provide them with the capital they need to grow and succeed.

• To be eligible, companies will need to seek a minimum of £20 million of investment and meet a set of criteria that demonstrate their R&D intensity.

  Innovation Strategy

• The Innovation Strategy, led by BEIS, will outline how the UK Government looks to achieve our ambitions in innovation and where we want to focus our efforts in the coming years, creating the confidence for business investment.

• To forge the UK’s future as a global scientific superpower, the Government is now investing £14.9 billion in research and development in 2021-22 (increased from £14.6 billion announced at Spending Review 2020), meaning UK Government R&D spending is now at its highest level in real terms for four decades.

• This investment reinforces the Government’s commitment to putting research and development at the heart of plans to build back better from the pandemic, and includes funding for association to Horizon Europe, investing at least £490 million in Innovate UK in 2021-22 and providing £800 million by 2024-25 for a new Advanced Research and Invention Agency (ARIA).

High-Skilled Migration

• The Government is modernising the immigration system to help the UK attract and retain the most highly skilled, globally mobile talent. This will ensure UK firms, particularly in science, research and technology, can continue to attract leading and high potential talent from around the world to support the post­ pandemic economic recovery and stimulate the UK’s long-term growth.

Skills - COVID-19 Recovery and the Skills for Jobs White Paper

• Creating opportunities to improve skills is critical to ensuring a strong recovery from the impacts of the pandemic, particularly for young people who have lost out on precious learning and employment opportunities.

• The Government is expanding traineeships and sector-based work academy programmes to provide high quality training with proven employment outcomes; incentivising new apprenticeship hires; giving employers a central role in identifying and planning local skills needs; boosting the National Careers Service’s capacity; and providing free courses to school and college leavers.

  Freeports

At the Budget, the Chancellor announced the eight Freeports in England, which will drive regeneration by bringing investment, trade and jobs. Freeports will be at East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth and South Devon, Solent, Teesside, and Thames.

Businesses within Freeport areas will benefit from more generous tax reliefs, simplified customs procedures and wider Government support.

Discussions continue between the UK Government and the devolved administrations to ensure the delivery of further Freeports in Scotland, Wales and Northern Ireland as soon as possible.

Levelling Up Fund

• The £4.8 billion Levelling Up Fund will invest in infrastructure that improves everyday life across the UK, including regenerating town centre and high streets, upgrading local transport, and investing in cultural and heritage assets.

UK Community Renewal Fund/ UK Shared Prosperity Fund (UKSPF)

• The £220 million UK-wide Community Renewal Fund will provide funding for local areas across the UK in 2021-22 to help them prepare for the introduction of the UK Shared Prosperity Fund, in addition to the continued high level of funding from EU structural funds.

Towns Fund

• Through the Towns Fund the Government has confirmed a £1 billion investment in 45 Town Deals across England, which will help local areas to grow their economies, create and sustain local jobs whilst encouraging opportunities to reshape the look and feel of their area.

Green Growth

• Supporting business to modernise and adapt will be key to meeting our climate change targets. The Prime Minister’s Ten Point Plan for a Green Industrial Revolution sets out how we will build back better whilst supporting green jobs and accelerating our path to net zero. Mobilising £12 billion of public money, and potentially three times as much from the private sector, the plan can help create and support up to 250,000 green jobs compatible with our net zero future. Innovations across industry, buildings, energy and transport will spur business to adapt to this future.

Regulatory Reform

• Now that we have left the EU, the UK can now design its regulations in ways it has not been able to for years. The Government will take full advantage of this opportunity, ensuring that regulation does not pose an unnecessary barrier towards businesses innovation and growth.

• The Prime Minister has established a Better Regulation Cabinet Committee, chaired by the Chancellor, to ensure the Government is driving an ambitious programme of regulatory reform that enables and supports growth and innovation across the economy.

• The Government has already started a wide-ranging reform programme. We are overhauling procurement rules, introducing landmark planning reforms, consulting on gene editing, reforming financial services, amongst many others.

  London Inter-bank Offered Rate (LIBOR)

• Responses to the Treasury’s recent consultation supporting the wind-down of critical benchmarks, such as LIBOR, supported further legislation to protect users and preserve market integrity. The Government affirmed its commitment to bring forward legislation on the gov.uk website and in its published letter to the Working Group on Sterling Risk-Free Reference Rates.