The government has announced new grants for businesses in retail, hospitality and leisure.

The news comes as the UK enters a new lockdown and businesses will have to remain closed until mid-February. The grants will be worth around £4bn and are expected to benefit over 600,000 business properties across the UK.

Chancellor Rishi Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

In addition to the business grants, the government will also give £594m to local councils to assist businesses impacted by the lockdown that are not eligible for the new payments.

Adam Marshall, the director-general of the British Chambers of Commerce, said: “While this immediate cash flow support for business is welcome, it is not going to be enough to save many firms. We need to see a clear support package for the whole of 2021, not just another incremental intervention.

“The government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.”

Roger Barker, the director of policy at the Institute of Directors, said: “This new grant package is welcome, and will go some way to reassuring the worst affected businesses.

“We are particularly pleased the Treasury has taken on board our recommendation to increase the discretionary local authority grant fund. This policy has helped to reach those who haven’t been able to access other support. The government should be prepared to top up the fund if necessary.

“The chancellor must remain wary of a spring cliff-edge in business support as the furlough scheme and other support measures unwind.”

England’s lockdown rules will be reviewed in mid-February.

More employees are expected to be put on furlough under the new restrictions. The furlough scheme is now running until April.