Owen Jones says that inheritance should be taxed
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It comes as the government gears up for the huge task of reopening the country, beginning with schools on March 8. Education secretary Gavin Williamson said the key aim was to “recoup the lost childhood” caused by the pandemic and ensure youngsters’ lives are not defined by the Covid crisis. Mr Sunak is delivering his budget on Wednesday and will announce the £5 billion rescue package for businesses as part of a wider investment strategy.
The Chancellor is also set to announce he will put billions of pounds into the UK Infrastructure Bank to invest in major projects around the country.
Another £375 million will be made available as a “Future Fund” for high-growth businesses.
The £5 billion fund for Restart Grants is aimed at the thousands of businesses including pubs, restaurants, clubs, hotels, gyms, shops and salons which have been hardest hit by the pandemic and lockdown.
It is thought that 700,000 companies will be eligible, and it means that £25 billion will have been given in direct grants.
Mr Sunak said: “Our local businesses have been hit hard by the pandemic – 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 £5bn of extra cash grants will ensure our high street can open their doors with optimism.”
On the further investment coming through the Infrastructure Bank, he added: ““We are backing this Bank with the finance it needs to deliver modern infrastructure fit for the 21st century and create jobs.
“This shows how serious we are about levelling up the country so that everybody can benefit from our future prosperity.
“Britain’s businesses and the Great British public deserve world-class infrastructure and that is exactly what this new Bank will help us deliver for them.”
Under the Restart Grants scheme, non-essential retail businesses will get up to £6,000 per premises to help them reopen and start trading safely.
Hospitality, accommodation, leisure, personal care and gym businesses in England – which will open later under the roadmap or will be more impacted by restrictions when they do open – will get up to £18,000 per premises.
Local authorities will be responsible for distributing the grants and receive funding in April so they can make payments to businesses as soon as possible, with the government’s existing business grants schemes ending at the end of March.
Local authorities in England will also get an extra £425 million to distribute grants to businesses not eligible for the Restart Grants, but which are experiencing a severe impact on their business due to public health restrictions.
The announcement ahead of Wednesday’s Budget statement in Parliament, comes amid dire warnings over the state of the economy.
A snap survey carried out by the Countryside Alliance revealed that a third of rural pubs are unlikely or do not know if they will be able to restart their business with the government timetable not allowing indoor customers until May 17.
Meanwhile, all of those questioned backed a campaign spearheaded by North west Durham Conservative MP Richard Holden to scrap beer duty.
Mo Metcalf-Fisher of the Countryside Alliance said that Mr Sunak’s scheme may save many of the pubs which are threatened with closure.
He said: “News of these grants will be a big relief for so many publicans, who are struggling daily to keep their already fragile businesses open for trading and people in jobs.
“The ability going forward, to allow all pubs to serve takeaway alcohol in line with when friends and family meet outside again in March, as well as an extension of VAT at 5% and reduced rates, will really make the difference in the fight to save these much-loved British institutions and to get customers back spending cash, in the national effort to rebuild the economy.”
Trade bodies also backed the move. Kate Nicholls, CEO, of UKHospitality said: “This new package of grant support is extremely welcome and will be a lifeline for hospitality businesses as they navigate the last few months of forced closure. With the success of the vaccine there is light at the end of the tunnel but closure costs are still racking up.”
Rishi Sunak discusses the Spring Budget
Mike Cherry, National Chair of the Federation of Small Businesses, said: “This money is a significant cash injection for non-essential retail, pubs, bars, restaurants, gyms, hairdressers and beauty salons. It will provide a much-needed lifeline, offering firms some reassurance as we look to put lockdowns behind us and focus on a vaccine-fuelled recovery.”
But commercial property veteran Tony Lorenz warned that the looming economic crisis “will make the 2008 financial crash look like a teddy bear in comparison”.
Mr Lorenz, who has been involved in the London commercial property market for 55 years and represents famous names like the Playboy Club, the Empire, the Sportsman and China White, is fronting the Give Hospitality a Break Campaign.
It is pushing for the government to facilitate a slow payback of deferred rents with 50 per cent in the first year and then monthly payments after.
Mr Lorenze said: “I have been through four recessions previously and even though Lehmann’s collapse in 2008 was very bad this is the worst devastation yet that we are entering at the moment.
“It is absolutely drastic out there.”
He has switched his business into corporate recovery and is handling around 80 negotiations at any one time.
He points out that in the last year the leisure industry has had just two months trading in “very restricted circumstances”.
He described how one client who runs a famous hair salon is on the point of quitting and how others are simply “handing back their keys” because there is no point trying to continue. Pubs and clubs “have been absolutely bombed out.”
He also warned of a coming collapse in the office market, with 30 per cent less demand expected after Covid.
This could see areas like Soho, Covent Garden and Canary Wharf have to become repopulated with residential property replacing offices.
He said: “This means that downsizing is the buzz word. The need for offices in the future has changed.”
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