British Chancellor Rishi Sunak has announced a £1 billion emergency support package for hospitality and leisure businesses hit hardest by the pre-Christmas collapse in trade caused by the surge in Omicron.
Eligible businesses will be able to apply for one-off grants of up to £6,000 per premises as part of a package of support which also includes more money to help smaller firms cover the costs of statutory sick pay.
The package announced consists of:
- £683million for targeted grants for hospitality and leisure businesses in England. Around 200,000 businesses will be eligible for the grants which will be administered by local authorities and will be available in the coming weeks.
- £102m for firms outside the hospitality and leisure industries but which might be vital to the supply chains in those sectors. This is on top of £250 million of previously allocated funding.
- £30m for theatres, orchestras and museums which have been forced to shut down again as people exercise extra caution in the face of the latest rise in Covid cases. This support will run through to March 2022.
- The return of the Government’s Statutory Sick Pay Rebate Scheme (SSPRS) for companies with fewer than 250 employees. The scheme reimburses firms for the cost of statutory sick pay for Covid-related absences, for up to two weeks per employee.
Mr Sunak said: “We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time. “So we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the Culture Recovery Fund.”
British Prime Minister Boris Johnson delayed a decision on further Covid restrictions, said: “With the surge in Omicron cases, people are rightly exercising more caution as they go about their lives, which is impacting our hospitality, leisure and cultural sectors at what is typically the busiest time of the year.”
Business leaders say the effect of the Plan B measures, which include guidance to work from home, has already left many pubs, restaurants and entertainment firms on the verge of collapse.
The crisis is most acute in central London where hospitality businesses have seen a 70 per cent drop in revenues — double the levels in the rest of the country.
The data, compiled in a survey for UK Hospitality, also showed that up to one-third of central London premises have already closed early for the holidays, a major blow to the sector.
Although Mr Sunak’s cash bailout will be welcomed by firms, business leaders fear it may be a sticking plaster and stressed the need for further support in the coming weeks, especially if tighter restrictions are imposed.
Business groups are asking for longer-term measures such as extending the 12.5 per cent VAT rate beyond next April or business rates relief.
Kate Nicholls, Chief Executive of UK Hospitality, said cash reserves for businesses in central London were already “stretched thin” following the impact of previous lockdowns and the fall in tourism caused by international travel restrictions. She added: “Central London’s hospitality businesses are critical to the recovery of the London economy, but they are the most fragile and least resilient.”
To provide continued support to the cultural sector, £30 million further funding will be made available through the Culture Recovery Fund to support organisations such as theatres, orchestras and museums through the winter to March.
This figure will build on nearly £240 million of cultural grant support already allocated this financial year or currently available for organisations to bid for. As part of this support announced, the devolved administrations will receive around £150 million of funding through the Barnett formula, comprising around £80 million for the Scottish government, £50 million for the Welsh government and £25 million for the Northern Ireland executive.