Rishi Sunak’s £ 1bn Covid lifeline for hospitality ‘won’t cover loss of crucial business’

Rishi Sunak yesterday announced a £ 1 billion hotel industry bailout to help businesses 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 sickness benefits for Covid-related absences for small and medium-sized employers. It came the day that Britain’s debt – with over £ 400 billion already spent to tackle the pandemic – hit a record high of over £ 2.3 trillion.

There was a mixed reaction from businesses to the announcement – with one hotel group boss calling it a “dud cracker.”

The Chancellor said the “generous” grants were comparable to those provided when hotel businesses were shut down completely earlier this year.

And he said it was “important to remember that we already have support in place that lasts until next spring” – including a reduced rate of VAT and commercial rates for the hospitality and hospitality sectors. tourism.

Mr. Sunak said: “We recognize that the spread of the Omicron variant means that companies in the hospitality and leisure industries face enormous uncertainty at a crucial time.

“We are therefore stepping in with £ 1 billion in support, including a new grant program, the reintroduction of the statutory sickness benefit reimbursement scheme and additional funds released through the Culture Recovery Fund.”

The legal sickness benefit reimbursement scheme will be open to employers with fewer than 250 employees and will reimburse them for the cost of Covid-related absences for up to two weeks per employee.

Mr Sunak also said that an additional £ 30million will be made available through the Culture Stimulus Fund, and more than £ 100million will be made available for local authorities to support d ‘other companies.

it will be a help

A village pub owner who lost more than 100 bookings in just over a week after the introduction of Plan B restrictions has supported the Chancellor’s “helping hand” with hospitality.

Marc Strzyzewski, 38, runs the Tiger Inn in Turnditch, Derbyshire with his wife Rosie, 30.

They are famous for their Thursday pie nights, with some 178 varieties.

“I was relieved when I heard Rishi’s announcement,” he said. “All restaurants need these subsidies right now because we are losing customers at the most critical time. The Christmas period usually helps us get through January and February. But we’ve had so many cancellations.

Mr Strzyzewski, whose family has run the rural inn for 22 years, said he has weathered the pandemic well so far after switching to selling take-out with free delivery.

But with the onset of winter, take-out orders began to decline, leaving the restaurant more reliant on internal reservations – which fell with the arrival of Omicron.

Mr Strzyzewski added: “We still need more clarity from the government. But with this helping hand we are in a much better position than we would have been. We are grateful. ‘

But Tim Rumney, managing director of BWH Hotel Group Great Britain, said the package was “like a cracker on Christmas Day”.

“Support is always welcome, but it just doesn’t go far enough to help us solve the problems we are going through,” he told BBC Radio 4’s PM program.

The hospitality industry relies on Christmas sales for up to a third of its annual revenue and to overcome them in January and February.

Critics welcomed the offer of help, but argued that the £ 6,000 grants would not be enough.

Jonathan Neame, boss of Britain’s oldest brewer Shepherd Neame, said: “We welcome the government listening, but it seems insufficient to make up for the millions of pounds in lost sales.”

Des Gunewardena, who runs the D&D restaurant chain, said £ 6,000 would not even cover Christmas decorations on his restaurants.

TITLE OF BOX

After nearly two years of battling the pandemic, Nick and Carrie Smith were eagerly awaiting a busy Christmas time in their board game cafe to “put some much-needed money in the bank.”

The Ludoquist Café, which opened in Croydon, south London, in 2017, has more than 1,500 board games and sells food, drink and pizza.

But after Omicron’s coup and the government advised the public to limit socialization, the number of customers fell off a cliff.

On what would have been the busiest Friday of the year in a space that could accommodate over 100 people, they had “eight or nine”.

Mr Smith, 54, said last weekend they had lost more than £ 6,000. “If we are about to be closed again, the Chancellor has to think about offering a lot more,” he said.

“I don’t mean to be ungrateful, but he’s trying to be Santa Claus and is actually the Grinch.”

He added: “Many of our bigger restaurants have lost over £ 100,000 due to cancellations last week. It’s still the same this week and God knows what will happen on our New Year’s Eve.

“So each of these companies are facing losses of over £ 200,000 and have been offered £ 6,000 which doesn’t even cover the cost of our Christmas decorations.”

The Institute of Directors said the support would be a “welcome relief” for many companies.

Policy Director Dr Roger Barker said: “However, with the unwinding of a number of support schemes remaining at the end of the first quarter of 2022, such as the reduction in VAT for tariff support hospitality and businesses, businesses also need to be reassured that these measures will now last longer until 2022. ‘

Confederation of British Industry chief economist Rain Newton-Smith said any future foreclosure measures must also be accompanied by additional support.

She said: “The government must monitor the situation closely and ensure that any further restrictions go hand in hand with additional targeted cash support.”