Coronavirus: Hospitality reacts after Rishi Sunak unveils £1bn fund for businesses in England

Tanwen Dawn-Hiscox

Tanwen Dawn-Hiscox

Deputy Editor

Chancellor of the Exchequer Rishi Sunak has unveiled a £1bn bailout package for businesses affected by the surge in Omicron cases sweeping across England.

The fund will be distributed mainly to hospitality and leisure businesses in the form of grants of up to £6,000, and, additionally, the government will help firms with the cost of sick pay for absences due to Covid. 

An extra £30m will be given to art and theatre organisations in the UK via the culture recovery fund.

As well as compensation for England, the Scottish government will receive £150m, the Welsh government £50m and Northern Ireland £25m to make up for lost income in December.

The news follows on calls for support from hospitality, which has faced a massive wave of cancellations in the past two weeks since the government warned of a new strain of coronavirus causing a spike in infections.

The Chancellor said the support would go towards helping the hospitality and leisure businesses struggling in the run-up to Christmas, usually a highly lucrative period for many, adding that he would "always respond proportionately and appropriately to the situation we face."

Losses in the sector have been estimated to amount to 60 percent of December trade, according to UKHospitality.

The trade body's CEO, Kate Nicholls said: “Now is the time to get emergency cash support to businesses to struggling with revenue hit and cashflow squeeze and they will help them protect jobs and keep business afloat.

“We hope that this will be a short period of restrictions and that then we can get back to managing to live with the virus and reverse restrictions as quickly as possible to allow business to recover rapidly.”

Asked whether he could rule out any more Covid restrictions in the coming days, the Chancellor said he understood people's frustrations, but that the UK faced a very uncertain situation and thus that he could make no guarantees.

He said that ministers were constantly reviewing the situation, and monitoring the data "day-by-day, hour by hour." 

Hospitality reactions

Hospitality business owners and representatives were quick to react, but while some were relieved to see some financial support provided, others, including CEO and founder of Gaucho and M Restaurants, Martin Williams, warned that it would take much more to support businesses after the losses incurred this month.

He said: “This support is too little too late and will only act as a sticking plaster on major challenges for the sector. The return of SSPR is welcome but must be extended to all businesses to avoid mass layoffs.

"What small and large business alike need right now is a 2022 strategy which sees the extension of 75% Business Rates Relief and the introduction of a permanent 12.5% VAT rate. These two levers have been effective in supporting the hospitality sector throughout 2021 and will be paramount in the continued survival of hospitality!”

After an initially warm reaction to the announcement, UKHospitality followed-up with words of caution as to the need for sustained support should more restrictions be introduced in the coming days.

Stacey Sherwood-French, co-owner and Director of JÖRO concurred, and said: "It’s clear that the support package recognises the hospitality industry and any assistance is welcomed and appreciated.

"However, for a lot of companies there have been significant losses across the board from December trade, heading into January with uncertainty and empty bank accounts - the industry needs to see extended long term assistance. This is a short-term plaster on big wounds. 

She called for further reduced VAT and loan repayment extensions, as well as of of business rate reductions, adding that "any further restrictions placed upon the industry also need to be supported further to the today’s announcements."
Meanwhile, Des Gunewardena, CEO of D&D called out the lack of acknowledgement for the plight of city businesses, particularly in the capital, in the Chancellor's speech.

He said: "The Chancellor’s announcement of 6k per site for businesses like ours is wholly and shockingly inadequate. Many of our larger restaurants in Central London -Quaglino’s,100 Wardour Street, Coq d’Argent etc..-each lost 100k+ revenue from cancellations last week.

Whereas, he pointed out, in other countries like France and the US, restaurants have received full financial support throughout lockdowns, "the UK government continues to fail to do that."

"The announcement of additional local government funding and further rates support is of course welcome. But the numbers talked about are pretty small/We await details of that. London needs to receive a major chunk. It is central London that is in the eye of the Omicron storm."

"That’s where financial support is most needed…Not in rural areas, suburbs, smaller cities. London is being levelled down big time."

Simon Wood, chef owner of the WOOD restaurant group, called the sum "laughable," "deluded," and "certainly no help at all," and renewed calls for the introduction of a hospitality minister in government.

Owner of the Darjeeling Express, Asma Khan, responded in jest - with a question many will be asking themselves as they apply for business-saving grants.

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Tanwen Dawn-Hiscox

Tanwen Dawn-Hiscox

Deputy Editor 21st December 2021

Coronavirus: Hospitality reacts after Rishi Sunak unveils £1bn fund for businesses in England