Sunak unveils £1bn fund for businesses

Rishi Sunak has unveiled £1bn in financial support to help the UK’s struggling hospitality and leisure sector amid a mass cancellation of Christmas plans as daily Omicron cases soar above 91,000.

This comes at Boris Johnson confirms that no new Covid restrictions will be brought in for England before Christmas, but warns: “we can’t rule out any further measures after Christmas.”

The chancellor has announced an extra £30m to help theatres and museums, which will run from the winter to March 2022, in addition to cash grants for businesses of up to £6,000 per premises. The government has also promised, from today, to help firms with the cost of of sick pay for Covid-related absences, although this statutory sick pay rebate scheme is only available to businesses with fewer than 250 employees.

Even without another lockdown, consumer fear over the virus and government advice to limit social contact is wreaking havoc on the hospitality industry. Hospitality UK reports that many businesses have lost 40 to 60% of their trade for December – the most crucial month for driving revenue. And almost half of London’s major theatres have cancelled performances in the past week. 

Mass infection among the workforce is piling further pressure on businesses. London’s Natural History Museum has already been forced to close its doors for a week due to coronavirus-related staff shortages. 

Many business leaders have welcomed today’s government package. But others have stressed that most detrimental of all is the lack of clarity on whether or not businesses could still be forced to close at a later date. 

Sunak has refused to provide any reassurance on this matter, insisting he cannot rule out the possibility of any more Covid rules before New Year.

Michael Kill, the chief executive of the Night Time Industries Association, demands that ministers provide a long-term plan for tackling new Covid variants, adding: “the open/close strategy is crucifying businesses.”

Nathan Godley, of restaurant supplier Premier Seafoods, says the failure to rule out further closures makes advanced planning, required to order food in a complicated supply chain, near-impossible. He adds: ”I don’t need any handouts. I’m not asking for that. I am just asking for certainty.”

But is “certainty” a realistic demand in the face of such an unpredictable and fast-moving virus? Even if the government definitively ruled out the possibility of any further closures, this wouldn’t prevent individuals from modifying their behaviour if cases soar. According to IPSOS MORI, nearly 60% of the public say they are currently choosing to avoid public transport, not attending social gatherings in the houses of friends and family, and not going to pubs or restaurants. 

Of course, one additional measure which would provide some relief to businesses grappling with staff shortages – and come at no extra cost to the government – is reducing the Covid isolation period. 

Health Secretary Sajid Javid is pushing to shorten the period from ten days to seven, provided individuals get negative lateral flow tests on day six and seven.

While details are still being finalised, this change of rules is expected to come into effect later this week.