Sunak announces £1 billion support for Omicron-hit businesses

Support for Omicron-hit businesses
Outdoor seating in Soho on December 18, 2021 in London. (Photo by Hollie Adams/Getty Images)

Chancellor Rishi Sunak on Tuesday launched a £1 billion aid package to help businesses hardest hit by the Omicron coronavirus variant over Christmas.

The plan will provide grants to firms in the hospitality and leisure sectors during what is normally their busiest time – and hand out statutory sick pay for small and medium sized businesses, the government said in a statement.

The hospitality sector has repeatedly called for state help in recent weeks, as soaring coronavirus infections spark staff absences and tumbling demand. Pubs and restaurants have seen Christmas parties and bookings cancelled because of the spread of the Omicron variant of the virus, hitting December trade by as much as 60 percent.

“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,” Sunak said. “So we’re stepping in with £1 billion of support.”

About 200,000 businesses will be eligible for one-off grants of up to £6,000 each per premises under the new scheme, which will be available in the coming weeks, administered by local authorities.

Another £100 million will be provided for local authorities to support other struggling businesses, such as those who supply the hospitality and leisure sectors. This is on top of the £250 million of previously allocated funding that remains with local authorities.

And the state will pump £30 million into its so-called culture recovery fund to support England’s cultural organisations over the winter.

“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,” added Prime Minister Boris Johnson in the statement.

“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.”

As increasing numbers of Covid-19 cases means more workers taking time off work, the government has reintroduced the Statutory Sick Pay Rebate Scheme, which will help small and medium-sized employers – those with fewer than 250 employees – by reimbursing them for the cost of Statutory Sick Pay for Covid-related absences, for up to 2 weeks per employee.

Firms will be eligible for the scheme from today (21 December) and they will be able to make claims retrospectively from mid-January.

Across the country, all sectors of British industry have been hit as staff contract the virus and are forced to self-isolate at home.

Retailers have felt the chill from Omicron in December, as shoppers stayed at home to prevent catching the virus before Christmas, employers’ association the CBI said.

The Confederation of British Industry’s lead economist Ben Jones said retail sales had slowed and expectations for January had been downgraded.

“The concern now is the potential for rapidly rising sickness and staff absences to cause renewed disruption to supply chains in the New Year,” he added.

The hospitality and retail sectors were already feeling the pinch of staff shortages, as foreign staff left due to the pandemic and new post-Brexit immigration rules.

The government is banking on an ambitious campaign to get all adults in England to have a booster jab of a Covid vaccine by the end of December to try to stop the spread of the mutation.

The director of the Wellcome charitable foundation, Jeremy Farrar, told BBC radio transmission was “eye-wateringly high”, as daily infection rates nudged towards 100,000.

But unlike governments in some of Britain’s nearest neighbours on the European mainland, Johnson has ruled out immediate curbs in the run-up to Christmas.

Tighter public health measures could yet be introduced after this weekend, according to media reports.

Twelve months ago, Johnson was forced to impose restrictions on indoor mixing and social distancing as the Alpha variant of the virus spread rapidly, putting hospitals under pressure.