Chancellor Rishi Sunak to announce a new £ 5bn ‘restart’ subsidy program in his budget to help stores, pubs, hotels and other businesses most affected by Covid-19, bearing total spending on these subsidies to 25 billion pounds.
The new grant scheme – worth up to £ 18,000 for larger companies – is intended to help UK businesses until June 21, when ministers hope the final coronavirus restrictions will be lifted.
Sunak is also expected to announce in its budget that other support programs for businesses and individuals – including the holiday program – will be extended until the end of June.
The grant program, administered by local councils, will help nearly 700,000 businesses, including stores, pubs, clubs, hotels, restaurants, gyms and hair salons.
Sunak said, “Our local businesses have been hit hard by the pandemic – that’s why we went big and went early with a multibillion pound package of support.
“There is now light at the end of the tunnel and this additional £ 5 billion in cash grants will allow businesses on our high street to open their doors with optimism.”
The Chancellor hopes this will be the last such intervention, but her allies are careful not to rule out the need for additional state support if the virus reappears as a threat in the fall.
Under the scheme, non-essential retail businesses will receive up to £ 6,000 per establishment to help them reopen and start trading safely. According to the government’s roadmap, the stores will reopen no earlier than April 12.
More money will be available for hospitality, accommodation, recreation, personal care and gyms, which will reopen later and be more affected by the restrictions when they open. They can receive up to £ 18,000, depending on their assessed value.
Meanwhile, local authorities in England will also receive an additional £ 425million to distribute grants to businesses ineligible for ‘restart grants’ but still suffering from Covid restrictions.
Sunak has already spent £ 280bn to support businesses and workers throughout the pandemic, but the budget will further increase borrowing in the UK. The Chancellor admitted in a Financial Times interview that public finances were facing “enormous strains”.
Separately, Sunak’s budget will include details of a new UK Infrastructure Bank, which will be based in the north of England, to work with the private sector on environmental projects and programs to ‘level’ the country.
The bank, to be launched in the spring, will receive an initial £ 12bn in equity and debt capital and an additional £ 10bn in government guarantees. It will offer a range of products including loans, equity and guarantees.
Sunak wants her to promote projects such as renewable energy, carbon capture and storage, and transportation, and provide advice on complex infrastructure projects.