Rishi Sunak to offer £5bn 'restart' boost to help struggling businesses reopen

27 February 2021, 22:30 | Updated: 28 February 2021, 07:43

Hundreds of thousands of business will be able to apply for 'restart' grants
Hundreds of thousands of business will be able to apply for 'restart' grants. Picture: PA Images
Ewan Quayle

By Ewan Quayle

Hundreds of thousands of business hit hardest by Covid-19 will able to get 'restart' grants as part of a £5 billion scheme to help them reopen as lockdown is eased.

Rishi Sunak will announce booster payments worth up to £6,000 per premises to help pubs, restaurants, shops and other non-essential retailers welcome back customers and trade safely as measures are gradually lifted.

Hospitality, hotels, gyms, as well as personal care and leisure firms, will be eligible for up to £18,000 per premises as they reopen in the Spring

Read more: Rishi Sunak says UK economy will face 'enormous strains' post-lockdown

The Treasury estimates 230,000 firms will be eligible for the higher band, which will be awarded based on their rateable value, and 450,000 shops will also be able to apply.

The £5 billion is targeted at England, but the devolved nations in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding through the Barnett formula.

Chancellor Rishi Sunak has promised billions to struggling shops hit hardest by Covid-19
Chancellor Rishi Sunak has promised billions to struggling shops hit hardest by Covid-19. Picture: PA Images

Mr Sunak told the Mail on Sunday the scheme would provide at-risk businesses with "the support they need to get them through, get them back on their feet and get the tills ringing once again".

Mr Sunak said: "Our local businesses have been hit hard by the pandemic which is why we went big and went early with a multibillion-pound package of support.

"There's now light at the end of the tunnel and this £5 billion of extra cash grants will ensure our high street can open their doors with optimism."

Local authorities will be tasked with distributing the grants and will receive the funding in April.

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The UKHospitality trade body welcomed the plan, saying many firms are "struggling to see how they could survive through" Boris Johnson's road map for reopening, with laws on social distancing set to continue until at least June 21 - the earliest date when nightclubs will be considered for reopening.

Chief executive Kate Nicholls said: "Cash reserves have been severely depleted after a year of closure and restrictions and these grants are a very welcome boost, putting the sector in a better place to restart.

"Businesses are crying out for the cash now so there can be no further delays which might make it too late for some."

But she said the grants must form part of a wider package that includes an extension to the reduced VAT rate and a business rates holiday.

"Without these measures, and full furlough while we re-open, the hospitality sector's recovery will be stunted along with our ability to start tackling unemployment by creating jobs," she added.

The British Retail Consortium (BRC) joined UKHospitality in calling for clarity on whether the grants will be subject to state aid caps mirroring the EU's, but welcomed the funding as "a vital injection of funding during this extremely challenging period".

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BRC chief executive Helen Dickinson did, however, warn that the grants "will only provide temporary relief" and called for an extension to the moratorium on aggressive rent enforcement and to the business rates relief in the Budget.

Federation of Small Businesses national chair Mike Cherry said the grants will "provide a much-needed lifeline", but called for the Chancellor to set out more funding "for those that have been excluded from income support throughout this crisis".