Sunak pledges £1bn support to desperate businesses over Xmas as Omicron cases soar

21 December 2021, 13:00 | Updated: 21 December 2021, 15:18

  • £1billion in support announced to help firms survive Omicron Xmas downturn
  • Some businesses will be able to apply for one-off grants of up to £6,000
  • Government to cover statutory sick pay costs for Covid-related absences for small firms

By Patrick Grafton-Green

Rishi Sunak has pledged £1billion in support for desperate businesses across the UK amid the rapid spread of the Omicron Covid-19 variant.

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Businesses in the hospitality and leisure sectors will be able to get one-off grants of up to £6,000 per premises they run, the Chancellor said.

Local authorities will also be given more than £100million to support other businesses.

READ MORE: Warning of 'cataclysmic Christmas' for hospitality as firms plead for clarity from No10

READ MORE: Have yourself a 'cautious' little Christmas, minister tells LBC

Companies with fewer than 250 staff will be allowed to claim back up to two weeks worth of statutory sick pay for each employee who gets the virus.

The Treasury also said £30 million will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support.

Mr Sunak said this afternoon he was "confident" the extra support would help "hundreds of thousands" of businesses and millions of employees during what is usually a busy period of the year.

He insisted the new grants were as "significant" and "comparable" to those given out under full lockdown.

Business groups welcomed the new package but warned grants must be paid out swiftly. They also said more support would be needed in the event of further restrictions.

Pressed on whether the new cash was enough to help businesses, the Chancellor said: "If you look at the grants that we're providing today, up to £6,000 for hospitality businesses, they are comparable in generosity to the grants that were provided when these businesses were fully closed, completely closed, earlier this year.

"It's worth £1 billion, it's a very significant amount of support."

He added there was existing support, like the VAT cut for hospitality, saying: "I think taken together, the steps we've announced today will help hundreds of thousands of hospitality businesses and the millions of people that they employ."

Asked if more support will be offered if restrictions are tightened further, he told broadcasters: "I will always respond proportionately and appropriately to the situation that we face. People can have confidence in that."

The British Chambers of Commerce director general Shevaun Haviland said the grants would "provide some much-needed support in the face of this increasingly difficult trading period".

But she added: "Clarity and speed will be needed to ensure that these grants are paid out swiftly to help these hard-pressed firms weather the next few weeks.

"Whilst these measures are a positive starting point, 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."

Kate Nicholls, chief executive of trade body UKHospitality, described it as a "generous package" but added: "There is now a real urgency in getting this funding to businesses so we urge local authorities to prioritise distribution of funds to make sure jobs and businesses are preserved through this difficult period."

The Federation of Small Businesses national chairman Mike Cherry said: "With the prospect of one million people sick or self-isolating by January, we encouraged the Chancellor to bring back the Covid statutory sick pay rebate - we're pleased to see our recommendation taken forward today."

Many businesses are suffering due to staff contracting Covid-19 or customers staying away out of an abundance of caution due to Omicron.

A survey by the Night Time Industries Association (NTIA) of more than five hundred nightclubs, bars, pubs and hospitality venues revealed the sector faces a 'cataclysmic Christmas'.

Night time economy venues have lost £46,000 per unit in lost sales and cancellations during the festive period, the survey found.

Other daytime businesses were beginning to close their doors yesterday as well due to Covid-related staffing issues.

Any new restrictions are likely to come after Christmas with the Prime Minister saying the data around Omicron is being kept under constant review.

After a special two-hour meeting of the Cabinet on Monday, Boris Johnson said the Government needs to be clearer about the rate of hospital admissions associated with Omicron, and the effectiveness of vaccines against it, before imposing additional measures in England to prevent the spread of the virus.

Mr Johnson said the Government will "reserve the possibility" of implementing new restrictions, but this has caused opposition politicians and businesses to accuse him of lacking a clear plan.