Budget 2021: Pubs, restaurants, shops, gyms and hairdressers hit by Covid to receive £5 billion grant

Video report by ITV News Reporter Helen Keenan

Pubs, restaurants, shops and other businesses hit hardest by Covid in England will benefit from a £5 billion grant scheme to help them reopen as lockdown is eased.

Chancellor Rishi Sunak announced “restart grants” worth up to £6,000 per premises at his Budget on Wednesday.

Hotels, gyms and hairdressers, which will open later under the roadmap out of lockdown, will also be eligible for up to £18,000 per premises.

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

Local authorities will receive the funding in April and will be responsible for distributing the grants to businesses.

Scotland, Wales and Northern Ireland will receive a separate £794 million in funding through the Barnett formula.

A new mortgage guarantee scheme is also set to be announced in the Budget, reports ITV Granada Political Correspondent Hannah Miller

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.”

Trade association UKHospitality welcomed the plan, saying many businesses are “struggling to see how they could survive through” Boris Johnson’s lockdown roadmap.

Listen to the ITV News Politics Podcast:

Restrictions are set to continue until at least June 21 - with businesses like nightclubs being the last to reopen.

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 government should also consider reducing VAT rates and giving firms a business rates holiday.

She said: “Without these measures, and full furlough while we reopen, the hospitality sector’s recovery will be stunted along with our ability to start tackling unemployment by creating jobs."

The British Retail Consortium also welcomed the funding as “a vital injection of funding during this extremely challenging period”.

After June 21, all legal limits on social contact in pubs could be lifted. Credit: PA

It joined UKHospitality in calling for clarity on whether the grants will be subject to state aid caps.

British Retail Consortium chief executive Helen Dickinson also warned 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.

Federation of Small Businesses national chair Mike Cherry said the grants will “provide a much-needed lifeline”, but he called for more money “for those that have been excluded from income support throughout this crisis”.