£5bn UK high street COVID recovery fund in store in budget

Lucy Harley-McKeown
·3 min read
A man wearing a face mask waits beside a notice for 'Tier 3' or 'Very High' alert coronavirus restrictions displayed on the digital advertising screen of a bus stop on Kensington High Street in London, England, on December 18, 2020. Tier 3 restrictions began in London on Wednesday amid authorities' concern over escalating numbers covid-19 positive tests in the city. Shops are allowed to remain open in Tier 3 areas, but hospitality businesses are limited to takeaway and delivery service only, and entertainment venues  including theatres and cinemas must close. (Photo by David Cliff/NurPhoto via Getty Images)
The chancellor said the grants are intended to support shops and pubs as COVID-19 lockdowns ease in England and are worth up to £18,000. Photo: David Cliff/NurPhoto via Getty Images

Rishi Sunak plans to "get the tills ringing again," with a new £5bn ($7bn) grant scheme for high street businesses set to be announced in Wednesday's budget.

The chancellor said the grants are intended to support shops and pubs as COVID-19 lockdowns ease in England and are worth up to £18,000.

The payment, which 700,000 businesses will be eligible for, has been welcomed, however some groups have warned it doesn't go far enough.

Questions have been raised about whether the grants are an extension to support already offered — and set to expire at the end of March — or a reinforcement of help already available.

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The move comes as Sunak faces calls from all sides about how to spend money to foster recovery, with some comparing his plan to that of president Joe Biden in the US.

A briefing paper from the think tank the Institute of Public Policy Research (IPPR), released earlier in February, found that the economic boost so far announced by chancellor Rishi Sunak for the year from April (fiscal year 2021/22) was worth about 2% of the value of the entire UK economy before the pandemic (2019).

The Confederation of British Industry (CBI) also outlined areas for chancellor Rishi Sunak to focus on in next week's budget to help businesses out of lockdown.

CBI, which represents 190,000 businesses of all sizes and sectors across the UK, on Sunday morning urged the chancellor to hone in on "policies that will catalyse business investment" in key areas like jobs, skills and innovation.

The group warned that firms that are still in "emergency mode" are "sounding alarm bells" that any significant tax rises in the short-term will "stifle their ability to invest, hamper UK competitiveness and hold back our recovery."

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It suggested that a significantly more powerful boost of £190bn, equivalent to 8.6% of the value of the economy, would deliver faster recovery, stimulate business investment to its pre-pandemic level and halve the number of job losses – without risk of causing high UK inflation. This would quadruple the spend already laid out.

Despite this, Sunak has previously warned of the strains public finances are weathering due to the pandemic.

The chancellor said earlier this weekend he wanted to "level with people about the challenge."

He also said: "I will do whatever it takes to protect the British people through this crisis and I remain committed to that."

The government has so far borrowed £271bn this financial year — up £222bn on 2019-20. This has pushed the national debt to £2.13 trillion.

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