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The support package for hospitality businesses includes one-off grants, covering costs of statutory sick pay for COVID-19-related absences and more.
LONDON — U.K. Chancellor Rishi Sunak on Tuesday set out a package of support for hospitality businesses as customers stay away amid skyrocketing case numbers of the COVID-19 Omicron variant.
U.K. hospitality and leisure businesses will be able to apply for one-off grants of up to £6,000. The Treasury has also made more than £100 million of discretionary funding available to local authorities to support businesses and said it will cover the cost of statutory sick pay for COVID-19-related absences for small and medium-sized employers. An extra £30 million will be made available through its Culture Recovery Fund.
Sunak has been under pressure to act after businesses have been hit by mass cancellations at their most profitable time of the year following warnings from politicians and scientists about acting cautiously during the festive period. Businesses also face a staffing crunch with thousands of workers self-isolating.
“We recognize that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time,” Sunak said in quotes released by the Treasury.
Prime Minister Boris Johnson has so far refrained from imposing more restrictions in England despite warnings from scientists that hospitals could be overwhelmed.
Some business groups welcomed the move. Shevaun Haviland, director general of the British Chambers of Commerce, said the measures would “provide some welcome respite to many of those businesses who have been hit hardest by the latest COVID measures.” But she said if restrictions persisted, or were tightened further, a wider support package would need to be put in place.
Lobby group UK Hospitality has been calling for an extension to business rates relief and a lower VAT rate for the sector.
Labour’s Shadow Chief Secretary to the Treasury Pat McFadden MP said the support amounted to a “holding package.”
“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. That is not the way that crucial public health decisions should be taken,” he said.
“Business support should have been announced when the Plan B changes were voted on last week but it has only happened after the chancellor was dragged back from California to focus on the plight facing businesses and workers here in the U.K.”
Labor group the Trades Union Congress meanwhile urged the government to go further, calling for state support for wages to help workers pay their bills amid a “lockdown by stealth.”
The Treasury said around 200,000 businesses would be eligible for the business grants, which will be administered by local authorities and will be available in the coming weeks.
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