Rishi Sunak offers £1bn for firms hit hardest by Omicron surge

London — Britain announced on Tuesday £1bn of extra support for businesses hit hardest by the wave of Omicron variant coronavirus cases, which is hammering the country's hospitality sector and other businesses.

Chancellor of the exchequer Rishi Sunak said he was confident the measures would help hundreds of thousands of businesses. But he added that he would “respond proportionately and appropriately” if the government were to impose further restrictions to slow Omicron.

For now, hospitality businesses in England are not subject to any new legal restrictions despite a 60% surge in Covid-19 cases over the past week which has taken the number of infections to about 90,000 a day.

Under the support announced on Tuesday, hospitality and leisure businesses in England will be eligible for grants of up to £6,000 pounds for each of their premises, accounting for almost £700m of the new package.

The grants were equivalent to those provided to hospitality businesses when they were fully closed this year, the finance ministry said.

But unlike earlier in the pandemic, there will be no extra government help for workers who lose their jobs or have their hours cut. Britain’s finance ministry said job vacancies were 50% higher than before the pandemic.

A fund to support cultural organisations would be boosted by £30m, while £100m would go to English local authorities for business support measures and £150m to governments in Scotland, Wales and Northern Ireland.

On top of the £1bn, the finance ministry said it would cover the cost of statutory sick pay for Covid-19-related absences, for up to two weeks per employee, for small and medium-sized companies across the UK.

Britain borrowed more than £300bn in the past financial year to help offset the hit to the economy from coronavirus and the government's lockdowns.

Asked about the likelihood of more restrictions, Sunak said the situation was too uncertain to know the path ahead.

“What the prime minister said is that we’re reviewing the data day by day, hour by hour, keeping the situation under constant review but can’t rule anything out,” he said.

Prime Minister Boris Johnson said on Monday he was looking at all kinds of measures to keep Omicron under control, cautioning that further restrictions might be needed.

Figures from trade body UKHospitality published on Monday showed a 40% fall in takings over the weekend and deep gloom about the prospects for New Year’s Eve.

“This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated,” UKHospitality CEO Kate Nicholls said.

However, the lack of help for workers in the hospitality sector was criticised by the Resolution Foundation think-tank, which said low-paid workers losing their jobs would suffer a 70% drop in income, compared with a 20% fall under furlough.

“The scale of support to firms is sufficient only for a best-case scenario of a flash wave (of Omicron), while the lack of fresh support for workers leaves many at risk of major income falls in the weeks ahead,” Resolution Foundation chief economist Mike Brewer said.

Reuters