£5bn scheme to save the high street unveiled by Rishi Sunak

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Rishi Sunak
Rishi Sunak

A £5bn scheme for to save high street retail, leisure and hospitality firms across England has been unveiled by Chancellor Rishi Sunak ahead of Wednesday’s budget.

‘Restart grants’, worth up to £18,000 per company, will be distributed to help them reopen across the country, after lockdown restrictions are eased after April 12. Around 700,000 firms will be able to apply for the grants.

Although the move has been broadly well received by most – there are many who are concerned about how this will be funded, and that it could impact other areas of Sunak’s Spring Budget announcement later this week.

In the last financial year, the UK government has borrowed more than £270bn – an increase of £222bn on the previous financial year. National debt has now increased to more than £2.1tn as a result of the COVID-19 pandemic.

Industry reaction

New £5bn business grants will provide much-needed lifeline but suppliers likely to need additional help, say small firms across England. Responding to news, FSB National Chair Mike Cherry said: “It is an extremely challenging time for small businesses who have fought tooth and nail to stay afloat in the last year, so we are pleased that our calls for further cash grant support will be heeded.

“This money – £5bn for 700,000 businesses – is a significant cash injection for non-essential retail, pubs, bars, restaurants, gyms, hairdressers and beauty salons. It will provide a much-needed lifeline, offering firms some reassurance as we look to put lockdowns behind us and focus on a vaccine-fuelled recovery.

“The Government’s announcement also contains £425m for suppliers and others that have lost trade. Healthy supply chains are crucial to the economy, but many, particularly those in the event and hospitality sectors, have collapsed during the crisis. That is why it’s disappointing that the amount of discretionary grant funding provided amounts to only 5% of the total, as this will make it difficult for Local Authorities to reach many of those firms in the supply chain.

“Over half of those on furlough are outside of retail, leisure and hospitality, so the amount of ARG funding may need to increase to match the real pain in the economy.

“Councils must also prioritise issuing their grants. Government figures show that only 13% of existing funds given to them by the Treasury in mid-November had reached businesses by mid-January. They should be in a big race to stop supply chain businesses from going bust and have no excuse for any delays. They must increase the speed at which they get the money they do have out the door and into businesses’ bank accounts as we look to the future.

“We hope this announcement will be followed up at Budget by further good news for those that have been excluded from income support throughout this crisis. We have presented fully worked-up policy solutions to Government, alongside others. Ministers now have the chance to choose which of these to go for.”

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