Chancellor Rishi Sunak is to announce a new £5bn “restart” grant scheme in his Budget to help shops, pubs, hotels and other businesses most affected by Covid-19, taking total spending on such grants to £25bn.
The new grant scheme — worth up to £18,000 for the biggest businesses — is intended to help companies in England through to June 21 when ministers hope the final coronavirus restrictions will be lifted.
Sunak is also expected to announce in his Budget that other support schemes for businesses and individuals — including the furlough scheme — will be extended until the end of June.
The grant scheme, administered by local councils, will help almost 700,000 companies including shops, pubs, clubs, hotels restaurants, gyms and hair salons.
Sunak said: “Our local businesses have been hit hard by the pandemic — which is why we went big and went early with a multi-billion pound package of support.
“There’s now light at the end of the tunnel and this £5bn of extra cash grants will ensure businesses on our high street can open their doors with optimism.”
The chancellor hopes this will be the last such intervention, but his allies are careful not to rule out the need for further state support if the virus re-emerges as a threat in the autumn.
Under the scheme, non-essential retail businesses will get up to £6,000 per premises to help them reopen and start trading safely. Under the government’s road map shops will reopen no earlier that April 12.
More money will be available for hospitality, accommodation, leisure, personal care and gyms, which will reopen later and will be more affected by restrictions when they do open. They can receive up to £18,000, depending on their rateable value.
Meanwhile, local authorities in England will also get an extra £425 million to distribute grants to businesses not eligible for the “restart grants”, but are still suffering because of Covid restrictions.
Sunak has already spent £280bn on supporting companies and workers throughout the pandemic, but the Budget will add further to UK borrowing. The chancellor admitted in a Financial Times interview that the public finances were facing “enormous strains”.
Separately, Sunak’s Budget will include details of a new UK Infrastructure Bank, to be based in the north of England, to work with the private sector on environmental projects and schemes to “level up” the country.
The bank, which will launch in the spring, will receive an initial £12bn of equity and debt capital and a further £10bn of government guarantees. It will offer a range of products including loans, equity and guarantees.
Sunak wants it to promote projects such as renewable energy, carbon capture and storage and transportation and provide advice on complex infrastructure projects.