COVID-19 Funding – leaving the country in tiers

During the first Covid-19 lockdown, it was apparent that the self-employed and directors of small, limited companies have slipped through the cracks in terms of government support funding. Following the first national lockdown and a drop in infection, cases begun to spike again from September. The government brought in tiers which define the high and low risk areas affected by the virus.

However, as tier 3 is the most crucial tier before a full lockdown, funding from the government had focused solely on these areas, creating a lack of business support for tier 2 areas. This was labelled “ridiculous” by Jonathan Walker, the Director of Policy for the North East Chamber of Commerce.

The new national month-long lockdown which was announced for the 5th November until the 2nd December has posed additional threats for these businesses and other sectors, causing the furlough, or Coronavirus Job Retention Scheme) to be extended until March 2021.

As Walker claimed in The Northern Echo, it is “ridiculous” that the funding to support businesses should only come with those under tier 3 restrictions. During this period, there were no specific funding in place for businesses in tier 2 areas, many of which have seen a plummet in business since being on high alert. Walker stated that, “Businesses need sufficient support to protect jobs and prevent irreparable cash flow problems”. He expressed that, “Test and trace has been championed by the government but nationally it is not working…it is ridiculous that to get funding to get an effective system and support businesses, you need to agree to be in Tier 3”. Walker continued and informed that it should the government’s priority to prevent cities from entering Tier 3 restrictions. As “any measures that are introduced to minimise damage to our local economy, while ensuring everyone’s public health is protected as far as possible”. (The Northern Echo, 21st October 2020).

Stockton’s MP Alex Cunningham told The Northern Echo that he is being contacted daily by people who are worried that their businesses are in jeopardy. They have spent many years and life savings on these companies and investing in their communities, but it seems that a lack on financial support puts their livelihoods in danger. Although there was no funding for businesses in Covid Alert Areas, the government had expanded their Job Support Scheme for businesses who are closed in England due to Covid-19 restrictions (The Northern Echo, 21st October 2020).

However, on 9th June of this year, UK Parliament Early Days Motions brought out a petition which notes the difficulties which business owners faced during the Coronavirus pandemic. This petition raises specific attention to the self-employed and directors of small, limited companies, as it states that the government’s financial support have left behind those who have been left ineligible for any form of financial aid. These self-employed directors of these limited companies have always followed incentives from the government in ways such as tax arrangements. It is a real shame that the government has these company directors stranded as they are unable to access any financial support through the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme. This means that over 3 million business owners have been excluded from any financial government support. This petition was overall, made in order to prompt the government to create Covid-19 support packages that help those who are excluded from the current financial support schemes, which is currently “putting livelihoods and businesses at risk” (UK Parliament Early Days Motions, Tabled on 9th June 2020).

Although the government have paid little attention to Tier 2 areas during this second wave who were financially struggling, the second lockdown until the 2nd December means that the furlough scheme has been extended until March 2021. This offers more security for those who are out of work. However, those who are self-employed, and directors of small, limited companies have unfortunately slipped through the cracks in terms of financial support from the government. This is a shame for so many of these businesses as their directors have worked endlessly for years to create their companies and building their connections.

As this second lockdown end at the beginning of December, the government hopes to enter the exit phase, and the furlough scheme is due to end in March next year. With the potential vaccine also set to become available to the UK in December, this may give the government a new point of focus, to fund the small, limited companies and self-employed who are entrepreneurs, business owners, and not to mention tax payers, who deserve sufficient funding just as much as the rest as the country and the economy should begin to get back up on its feet.


COVID-19 Funding – leaving the country in tiers
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