Sunak throws a £1bn lifeline to hospitality

But businesses argue it won’t cover loss of crucial trading

RISHI SUNAK announced a £1billion bailout for the hospitality industry yesterday to help firms hit by a collapse in Christmas bookings.

Businesses struggling because of the Omicron variant will be eligible for one-off grants of up to £6,000.

Taxpayers will also cover statutory sick pay for Covid-related absences for small and medium-sized employers. It came on the day Britain’s debt pile – with more than £400billion already spent on countering the pandemic – hit a record high of more than £2.3trillion.

There was a mixed reaction from businesses to the announcement – with one hotel group boss branding it a ‘dud cracker’. The Chancellor said the ‘generous’ grants were comparable to those provided when hospitality businesses were completely closed earlier this year.

And he said it was ‘important to remember we have support already in place that lasts all the way to next spring’ – including a reduced rate of VAT and business rates for the hospitality and tourism sectors. Mr 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 £1billion 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.’

The statutory sick pay rebate scheme will be open to employers with fewer than 250 employees, and will see them reimbursed for the cost of Covid-related absence for up to two weeks per employee.

Mr Sunak also said an additional £30million would be made available through the culture recovery fund, and more than £100million will be available for local authorities to support other businesses.

But Tim Rumney, chief executive of BWH Hotel Group Great Britain, said the package was ‘like a dud cracker on Christmas Day’.

‘The support is always welcome but it just doesn’t go far enough to help us with the problems that we’re going through,’ he told BBC Radio 4’s PM programme.

The hospitality sector relies on Christmas sales for as much as a third of its yearly income and to tide it over through January and February. Critics welcomed the offer of help but argued the £6,000 grants would not be enough.

Jonathan Neame, boss of Britain’s oldest brewer Shepherd Neame, said: ‘We welcome the fact the Government is listening but this seems inadequate to compensate for millions of pounds of lost sales.’ Des Gunewardena, who runs the D&D restaurant chain, said £6,000 would not even cover his restaurants’ Christmas decorations. He added: ‘Many of our larger restaurants lost £100,000plus from cancellations last week. It’s the same again this week and heaven knows what’s going to happen to our New Year’s Eve.

‘So each of those businesses is facing £200,000-plus losses and has been offered £6,000 which doesn’t even cover the cost of our Christmas decorations.’

The Institute of Directors said the support will be ‘welcome relief’ to many businesses. Policy director Dr Roger Barker said: ‘However, with the unwinding of a number of remaining support schemes at the end of Q1 2022, such as the VAT reduction for hospitality and business rates support, businesses also need the reassurance that these measures will now last for longer into 2022.’

Chief economist at the Confederation of British Industry Rain Newton-Smith said that any future lockdown measures must also be matched with further support.

She said: ‘The Government must monitor the situation closely and ensure that any new restrictions go in lock-step with further targeted cashflow support.’

‘Doesn’t go far enough’