Chancellor Rishi Sunak makes £5billion pledge to pubs and high street shops

Pubs and high street shops will be thrown a lifeline in Rishi Sunak’s Budget as he promised to ‘get the tills ringing once again’.

On Wednesday the Chancellor will unveil £5 billion in cash grants for businesses suffering under the lockdowns.

He will announce the new ‘Restart Grants’ to help businesses reopen. The grants will be on top of £20 billion in direct cash grants already handed out during the pandemic.

Rishi Sunak is poised to announce £5billion for the struggling high street in next week’s budget (pictured preparing for the big announcement)

Last night Mr Sunak told The Mail on Sunday: ‘It’s been an incredibly difficult year for our high streets. But soon shops, pubs, cafes and restaurants will be able to open their doors once again, and we’re providing the support they need to get them through, get them back on their feet and get the tills ringing once again.’

Hospitality, hotels, gyms, hair and beauty salons will be eligible for up to £18,000 per premises.

The Treasury has estimated 230,000 firms will be able to claim for the higher band and 450,000 shops will also be able to apply.

The £5 billion pot is available to businesses in England while those in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding.

Mr Sunak promised continuing support for struggling businesses as the economy reopens

The Chancellor said: ‘Our local businesses have been hit hard, which is why we went big and went early with a multi-billion-pound package of support. There’s now light at the end of the tunnel and this £5 billion will ensure our high streets can open with optimism.’

Kate Nicholls, chief executive of industry group UK Hospitality, said the grants were ‘great news for businesses that have been struggling to see how they could survive through to the end of lockdown.

‘Cash reserves have been severely depleted after a year of closure and restrictions and these grants are a very welcome boost.’

Last week 68 Tory MPs urged ‘significant’ cuts to beer duty to help pubs win back custom from supermarkets.

The Budget is also expected to include an announcement to raise corporation tax as Mr Sunak lays down markers that he will need to start balancing the books.

Meanwhile, Tory backbenchers are worried about the possibility of a ‘stealth’ income tax raid that could take up to £6 billion.

The Treasury is understood to be considering freezing the point at which people start paying the basic rate of income tax – £12,500 – and the £50,000 threshold at which they begin paying the higher 40p rate.

The £5billion will come in addition to £20billion already handed out to businesses so far during the pandemic, Mr Sunak said

According to the Sunday Times, the freeze would be for at least three years. 

That would mean 1.6 million people pushed into a higher tax by 2024. 

A Treasury source called the move ‘quite logical’ and Andrew Griffith, who served as the PM’s chief business adviser in 2019 before becoming a Tory MP, said: ‘In a world where tough choices have to be made, the best form of those are ones that are the most broadly based. A freeze in allowances would be among them.’

Rishi Sunak has promised to ‘get the tills ringing once again’ with the Budget set to be announced on Wednesday

It’s estimated that an average family would lose £250 a year.

Also, it is reported that corporation tax will be raised from 19p in the pound to 25p by the end of the Parliament. 

Meanwhile, as revealed in the Financial Mail on Sunday, summer travellers face more expensive flights after Heathrow airport bosses hatched a plan to make airlines and passengers pay more. 

It wants to make every passenger pay an extra £8.90 Airport Recovery Charge this year as part of a package to cover the cost of fewer people flying during the pandemic and help recoup its record £2 billion loss for last year.

The Chancellor set the tone for his Budget by issuing a warning about the scale of economic damage caused by the pandemic and the need to repair public finances.

In an interview with the Financial Times, Mr Sunak said he wants to ‘level with people’ about the challenge facing him, adding that the UK is ‘exposed’ to changes in record-low interest rates, with a rise of 1 percentage point worth £25 billion a year to the Government’s cost of servicing its debt.

The Chancellor will unveil £5 billion in cash grants for businesses suffering from repeated lockdowns