Chancellor Rishi Sunak is expected to offer over 700,000 retail, hospitality and other businesses grants of up to £18,000 as part of a £5bn rescue package to be included in his Budget speech on Wednesday (3 March).
The new ‘Restart Grants’ will be directly distributed from local authorities from April and will replace the current grant system.
Speaking to Sky’s Sophy Ridge on Sunday the chancellor said: “We know that particularly businesses in hospitality, leisure, accommodation and retail have been affected by the restrictions…We want to support them as they reopen, we want to support them to keep staff, to pay bills and that’s why we’re launching the Restart Grants which we paid in April, worth £5bn in total.”
Under the scheme it is thought that non-essential retail businesses will be able to apply for grants of up to £6,000, while pubs, restaurants, hotels and leisure businesses will be able to apply for grants up to the full amount of £18,000.
Last week it was revealed that the chancellor is also expected to announce a further extension to the government’s furlough scheme until May.
The paper also cites government sources that following the May extension, the scheme will begin to be gradually wound down. It is thought that Sunak is also looking to reinstate a scheme that will see a one-off payment given to businesses that bring back furloughed workers.
UKHospitality has “warmly welcomed” the new package as well as the news an additional £425m has been added to the Additional Restrictions Grant (ARG) fund.
Kate Nicholls, CEO, UKHospitality said: “This announcement is great news for hospitality businesses that have been struggling to see how they could survive through to the Prime Minister’s reopening dates. 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.
“It is absolutely critical that the grant funding is put into the hands of hospitality business owners as quickly as possible. Businesses are crying out for the cash now so there can be no further delays which might make it too late for some.”
“While this is a positive step it needs to be part of a wider package at the Budget that includes an extension to the 5% VAT rate for a full year and a business rates holiday through 2021/22. 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.”