Sunak’s £5bn high street grants feared to be ‘sticking plaster’

Rishi Sunak’s £5bn grant scheme for high street businesses has drawn a mixed response from property industry figures, amid fears it will not stop tenants from going bust as lockdown lifts. The chancellor announced over the weekend that the grants, worth up to £18,000 each for shops, pubs, hotels and other businesses hardest hit by the pandemic, will feature in his Budget tomorrow (3 March). However, fears remain that they will do little to help companies, particularly in central London, which are struggling to keep their heads above water, without more fundamental reforms alongside. Firms in the West End, for example, are facing a summer in which they must reopen for business without the usual influx of international tourism, which makes up a significant part of their business. Ros Morgan, chief executive of business group the Heart of London Business Alliance, said that while the grants were welcome, the government needed to “take into account the higher costs of doing business”. Central London has been “disproportionately affected by a combination of social distancing measures and reduced footfall from workers, domestic and international visitors,” she said, calling for measures including long-term business rates relief. How will the grants work? The business grant scheme, carried out by local councils, will apply to almost 700,000 companies including shops, pubs, clubs, hotels, restaurants, gyms and hair salons. Non-essential retail businesses will get up to £6,000 for each premises to help them restart trading safely from 12 April at the earliest. Meanwhile, hospitality, accommodation, leisure, personal care and gyms, which will reopen later and will be harder hit when they do so, can receive up to £18,000. However Jack Shand, managing director at Linklaters’ real estate practice, said: “The chancellor’s announcement may serve as a sticking plaster, helping alleviate some of the enormous pressure being felt by businesses: for that we should welcome the initiative.  “However, the measures risk being like rubbing boot polish on a bald spot: a short-term solution which fails to address many of the underlying issues.” Charles Begley, executive director of the Westminster Property Association, added that previous support had been allocated to local areas across the UK based on residential population, meaning central London’s mix of low residency and usually high commercial activity caused it to lose out. “The road to recovery for many will be a long one, and going forward further support is likely to be required,” he added. Sunak has described the grants as a measure which will “ensure businesses on our high street can open their doors with optimism”. He is widely expected to announce further support as part of tomorrow’s Budget announcement, but that will not feature business rates reform, the possibility of which has been delayed until later in the year. Alan Spencer, Savills head of UK retail, said: “The support is welcome, but equitable distribution and targeting in the right areas to benefit the whole of the UK is perhaps an even greater challenge. “It is equally important to address some of the challenges that retail were already facing which have now been accelerated by the pandemic, with online spending bringing into focus a desperate need to work out a longer-term solution for rates,” he added. To send feedback, e-mail alex.daniel@egi.co.uk or tweet @alexmdaniel or @estatesgazette Image © Mark Thomas/Shutterstock