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Summary
- The UK government has announced a £5-billion scheme for high street recovery.
- The scheme is expected to help as many as 700,000 businesses to restart.
- The Confederation of British Industry has, however, said it may not be enough.
As many as 700,000 shops, hotels, restaurants, gyms, hair salons, and other businesses in England are set to benefit from the £5 billion scheme announced by the Boris Johnson government in a bid to support the ailing economy.
The scheme for the high street shops and hospitality businesses was announced just ahead of the budget on 3 March. Grants worth £18,000 per firm would help in restarting of businesses as lockdown eases in London, Sunak said.
He added that the government’s priority is to focus on jobs and businesses, despite huge pressure on public finances. He said that the scheme would help in the reopening of businesses, which is the right thing to do presently.
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Also read: Sunak may extend coronavirus support into summer
How will it help?
Sunak said that the Covid-19 pandemic has had a crippling effect on the hospitality sector and other public facing businesses and this grant would help them in getting back on track. Sunak said that these were part of the support measures announced by the government since the beginning of the pandemic and would continue to provide support when necessary. With this, the amount spent on direct support to businesses through the pandemic totalled £25 billion.
Also read: Sunak may use new ways to save jobs once the furlough scheme ends
The government has also announced a sovereign-backed mortgage guarantee plan to help those with small deposits to buy property, a visa plan that would enable researchers, engineers, and scientists to come and work in the UK and a £126 million-scheme for traineeships and a flexible apprenticeship.
As non-essential shops and other outdoor hospitality businesses are set to reopen from April 12, this scheme might help specific businesses but some organisations have also cautioned that this scheme would not be of sufficient help.
Is this enough?
There have been questions whether these measures as an extension of what has already been offered or supplementary to the available help. The Confederation of British Industry (CBI) has pointed out areas on which the budget needs to focus on. The body, which represents 190,000 businesses, has asked the chancellor to create policies that will give a boost to investment in jobs, innovations, and skills.
Also read: Why are the UK finance tax receipts projected to drop this year?
It has also warned the government that tax hike of any kind would cripple small businesses and affect their ability to contribute to UK’s recovery. The Chancellor has been facing political pressure from parts of the Tory party to increase taxes. There have been reports that Sunak might announce increase in corporate tax rates and dissolve income tax thresholds for three years.
The CBI has also said that a package worth £190 billion which would amount to 8.6 per cent of the GDP, would help stimulate investment and bring it to the pre-pandemic levels.
