FUNDING for the hospitality and retail industry is “essential” as lockdown extensions have pushed businesses to the edge, a business leader has said.

The Chancellor Rishi Sunak declared an extension to the furlough scheme, as well as an increase in corporation tax in the budget announcement.

He said coronavirus has caused one of the “largest, most comprehensive and sustained economic shocks this country has ever faced”, with borrowing forecasted to be £234 billion next year.

So Mr Sunak said the Government’s furlough scheme will be extended to the end of September, as will support for the self-employed.

Sam Good, manager of Our Colchester Business Improvement District, said: “We knew about the furlough extension before the budget was announced, and that’s been a real life-saver.”

A new restart grant will launch next month to help businesses reopen, with £5 billion of funding.

Mr Good said the £5 billion grant will determine which Colchester business will close or not.

The business rates holiday for the retail, hospitality and leisure sectors will continue until the end of June, and will be discounted by two thirds for the remaining nine months of the year.

Mr Good said: “The lockdown extension has pushed businesses to the edge, so funding for retail and hospitality firms is a key factor to helping them recover.”

The 5 per cent reduced rate of VAT for the tourism and hospitality sector will be extended for six months to the end of September, with an interim rate of 12.5 per cent for another six months after that.

“We are grateful for the support, and the businesses are grateful for the rates relief but we would have liked to have seen the extension go further,” Mr Good added.

“We are also overdue a business rates review.”

The Office for Budget Responsibility is now forecasting “a swifter and more sustained recovery” than they expected in November, predicting the economy will be 3 per cent smaller than it would have been in five years’ time because of the coronavirus crisis.

But Piers Baker, who owns The Sun Inn, in Dedham, believes the budget is positive "on the whole" for the hospitality sector.

He said: "The VAT reduction continuing and then increasing 12.5 per cent before 20 per cent next March seems reasonable but doesn't help wet led hospitality.

"The extension of business rates relief and then discounted for the rest of the year is extremely welcome and hopefully opens the path to a complete overhaul of the tax.

"Duty being frozen is good though we still have the highest duty rates in Europe.

"And of course the extension of furlough is extremely positive for our teams.

"These are all steps that will help us recover, paydown the debt we've taken on to get to this point and allow us to look positively to the months ahead."