A bailout package worth about £1bn for UK businesses losing trade because of the Omicron surge has been announced by the chancellor, Rishi Sunak.
The funding will primarily help firms in the leisure and hospitality sector, and follows concerns that they have faced cancelled bookings and plummeting custom since the government implemented its Covid “plan B”.
According to UKHospitality, many businesses have lost up to 60% of their trade in December, which is usually their most profitable month.
Sunak said the government was intervening because “the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time”.
The bailout package consists of four elements:
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Grants for hospitality and leisure businesses in England, worth up to £6,000 per premise. The Treasury has set aside £683m for these payments, which will be administered through local authorities and will be available in the coming weeks.
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Further grants for businesses in England, worth £102m, intended to help businesses most in need, and again administered through local authorities.
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The resumption of the statutory sick pay rebate scheme, which will reimburse employers in the UK with fewer than 250 workers for the cost of paying statutory sick pay for Covid-related absences for up to two weeks.
In addition, the Scottish government will receive £150m, the Welsh government £50m and the Northern Ireland executive £25m under the Barnett formula to offset the England-only spending.
The measures were broadly welcomed by business groups, although Labour described it as “a holding package from a government caught in a holding position”.
No firm has been legally required to close under plan B, which was announced by Boris Johnson for England earlier this month and which extended the use of face masks, required Covid passes for some venues and encouraged working from home.
But the move to plan B was quickly followed by advice from Prof Chris Whitty, the chief medical officer for England, that people should limit their socialising over Christmas to people and events that “really matter” and this, combined with a surge in Covid cases, led to dramatic falls in the number of people going out to pubs, restaurants and shows.
The measures announced by the Treasury on Tuesday are intended to compensate for the loss of earnings that businesses are already suffering.
Ministers have not ruled out imposing further restrictions on socialising after Christmas, which could lead to calls for a further bailout for hospitality.
When Sunak was asked in an interview if businesses would be offered more support if the rules tightened again in the coming days, he gave a non-committal answer.
He said he would always respond “proportionately and appropriately”, but he said the business grants he was announcing were “comparable to the grants that we provided for hospitality businesses when they were completely closed earlier this year”, and said other help for business was already in place until the spring.
Shevaun Haviland, the director general of the British Chambers of Commerce, said the measures were “a positive starting point” that would provide “some welcome respite” to firms hardest hit by the latest Covid wave.
But she urged the Treasury to ensure grants were paid out quickly, and said more help might be needed. “If restrictions persist or are tightened further, then we would need to see a wider support package, equal to the scale of any new measures, put in place,” she said.
Mike Cherry, the chair of the National Federation of Small Businesses, said: “These positive measures will help alleviate the intense pressures that small firms are currently under, and hopefully arrest a significant decline in confidence over this year.”
Kate Nicholls, the chief executive of UKHospitality, which represents the sector, said: “Now is the time to get emergency cash support to businesses to struggling with revenue hit and cashflow squeeze and they will help them protect jobs and keep business afloat.”
The shadow chief secretary to the Treasury, Pat McFadden, said Labour had been calling for a support package for business, but that it should have been announced when MPs voted for plan B last week.
Uncertainty remained, he said. “This is a holding package from a government caught in a holding position.
“The prime minister is a prisoner of divisions inside his party and within the cabinet about whether any further measures are needed and whether they will get past Tory backbenchers.”
Source: Guardian
