By Ben Kerrigan-
Uk chancellor, Rushi Sunak, has set out measures to help England’s hospitality sector as it struggles with a collapse in bookings sparked by the rise in Covid cases. Speaking on Tuesday, Rishi Sunak unveiled a £1bn fund including cash grants of up to £6,000 per premises for each eligible firm.He said the government would also help certain firms with the cost of sick pay for Covid-related absences.
The Treasury is also providing a £30m top-up to the Cultural Recovery Fund – which supports institutions such as museums and theatres – and reintroducing the Statutory Sick Pay Rebate Scheme which allows small and medium-sized companies to claim compensation from the government for the cost of their employees’ sick pay.
The HM Treasury said it recognised that the rise of the Omicron variant means some businesses are likely to struggle over the coming weeks, the government is providing one-off grants of up to £6,000 per premises for businesses in the hospitality and leisure sectors in England.
At what is often their most profitable time of year, many pubs and restaurants have seen cancellations and reduced footfall as people have responded to the rise in cases ahead of Christmas, with Hospitality UK reporting that many businesses have lost 40-60% of their December trade, often their most profitable month.
The government said it had chosen to provide generous grants, which are equivalent to the monthly cash grants provided to hospitality businesses when they were fully closed earlier this year, despite businesses now being still able to trade.
The effectiveness of government policies to support the economy through the pandemic and the success of businesses in learning to adapt means the economy is in a different place now than it was at the start of the crisis.
Many pubs and restaurants have been hit by mass cancellations amid fears over the spread of the new Omicron variant, and there are expectations in many circles that a new year lockdown is on its way.
The hospitality business has been affected by christmas party cancellations, following guidance from the government to restrict gatherings this christmas, and the direction for businesses to work from home.
Mr Sunak cut short his trip to the US to hold more talks with a range of hospitality and business organisations including peri-peri chicken restaurant Nando’s and brewery giant Greene King in response to the fresh COVID crisis on Friday.
Announcing the new economic support package on Tuesday, the chancellor said his Treasury have responded “generously” to a “difficult” situation.
“I know the current situation is very difficult especially for those in the hospitality industry so today we are announcing three new measures to help people and businesses,” Mr Sunak said.
£6,000 cash grants
“Firstly we are announcing a billion pounds in financial grant support which means eligible hospitality companies will be able to claim a cash grant worth up to £6,000.”
Theatres and museums
The chancellor has also announced a “£30m to top up our successful cultural recovery fund to support institutions like theatres and museums”.
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“And lastly, we are reintroducing our statutory sick pay rebate scheme so that small and medium sized companies can claim compensation from the government for the cost of sick pay for their employees.
“Taken together, I am confident that these measures will help hundreds of thousands of businesses and the millions of people that they employ.”
The chancellor added that he will act accordingly when asked if additional financial help could follow if more restrictions are imposed.The PM says he can not guarantee more COVID-19 restrictions won’t be put in place over Christmas and ‘act cautiously’.
“Now, of course I will always respond proportionately and appropriately to the situation that we face, people can have confidence in that, but where we are now we have responded I think generously today.
“The grants that I’ve outlined, up to £6,000, are comparable to the grants that we provided for hospitality businesses when they were completely closed earlier this year – so there is a benchmark for you.” He added that support including the reduced rate of VAT for the hospitality and tourism sectors lasts all the way into next spring.
The Treasury said around 200,000 UK businesses will be eligible for the business grants which will be administered by local authorities and will be available in the coming weeks.
Back in July, former culture secretary Oliver Dowden announced a £1.57bn Culture Recovery Fund rescue package for cultural organisations to help the sector survive, and when possible, reopen.
The fund has so far awarded funding to 5,000 organisations.
The Treasury said the top-up will enable more cultural organisations in England to apply for support during the winter.
Meanwhile, pressed on whether further restrictions this side of New Year in England could be ruled out, the chancellor reiterated that there is “an enormous amount of uncertainty at the moment” and said ministers are “keeping the situation under constant review”.
Boris Johnson has held off on introducing new restrictions in England after resistance from members of the cabinet, who demanded more evidence on the severity of Omicron.
The prime minister said on Monday that he reserved “the possibility of taking further action” and that the situation was “very finely balanced”.
There is concern that the Omicron variant could be much more transmissible than Delta.
Prime Minister, Boris Johnson 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.
That’s why we’re taking immediate action to help with an extra £1 billion in grants to these industries and reintroducing our Statutory Sick Pay Rebate Scheme.
I urge people across the country to please get boosted now to secure vital protection for yourselves, your loved ones and your communities.
Chancellor of the Exchequer, Rishi 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.
Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to Get Boosted Now”.