Rishi Sunak: Covid-hit hospitality businesses can claim cash grants and compensation for sick leave

ITV News Correspondent John Ray hears from businesses in Margate, a seaside town that suffered under high Covid rates last Christmas

Omicron-hit hospitality businesses will be able to claim up to £6,000 cash grants and companies can receive compensation for employees' sick pay, as part of a new support package, the chancellor has announced.

Rishi Sunak has announced three new "generous" measures to help the arts and hospitality industries get through what should be their busiest period, as restaurants' bookings plummet and theatres are forced to close amid a sharp increase in Covid cases.

From Tuesday, small and medium-sized companies - those with less than 250 employees - can be reimbursed by the government for the cost of statutory sick pay for Covid-related absences of up to two weeks per employee, said the chancellor.

"Eligible" hospitality and leisure businesses "impacted by Omicron" will be able to apply for a one-off cash grant of up to £6,000, said Mr Sunak. However, it is not yet clear how employers will be asked to prove how they have been affected.

Businesses in the arts will also receive further funding with £30 million allocated to the Culture Recovery Fund to help support the likes of theatres and museums.

Chancellor Rishi Sunak sets out the three new Covid support measures available for businesses

What exactly does the new Omicron financial bailout include?

  • "Eligible" hospitality and leisure companies can claim one-off cash grants worth up to £6,000 per premises. It is understood that all hospitality and leisure businesses can apply, as long as they can prove they have been "impacted by Omicron". It is not yet clear how businesses will be asked to prove how they have been impacted.

  • Small and medium-sized companies - those with less than 250 employees - can be reimbursed by the government for the cost of statutory sick pay for Covid-related absences for up to two weeks per employee. Firms are eligible for the Statutory Sick Pay Rebate Scheme (SSPRS) from today and will be able to make claims retrospectively from mid-January.

  • A £30 million boost to the Culture Recovery Fund to support organisations in the arts, such as theatres, museums and orchestras through the winter until March 2022.

  • Local authorities in England will also received a more than £100 million boost via the Additional Restrictions Grant (ARG) . Each local authority will have discretion to allocate this funding to businesses most in need.

  • As part of the package, the Scottish Government will receive an additional around £80 million in funding, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

When asked if businesses could count on more support amid uncertainty around the prospect of further Covid restrictions being imposed, the chancellor replied: "I will always respond proportionately and appropriately to the situation that we face, people can have confidence in that".

However, he would not be drawn on how likely it is that more measures will come into effect during the festive period and said data will constantly be kept under review.

The chancellor's announcement comes after business owners in the hospitality and arts sectors urgently called on the government to throw them a life line, as work forces become increasingly depleted due to staff isolating and punters cancelling bookings and shows in a bid to keep safe ahead of Christmas.

The chancellor did not rule out further support should more restrictions be imposed

A mixed response

Hospitality UK reported many businesses have already lost between 40-60% of their trade during December.

Kate Nicholls, chief executive of Hospitality UK, said the support packages would be particularly useful to small businesses.

“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,” she said.

“It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines."

Why is England not bringing in new restrictions, when other UK nations have already announced changes after Christmas?

Michael Kill, chief executive of the Night Time Industries Association, said support for the culture sector was “far too little” and “borders on the insulting.”

He said: “Businesses are failing, people are losing their livelihoods and the industry is crippled.

“Mixed messaging, coupled with additional restrictions, have had a catastrophic impact on our sector over the last two weeks.

“At this critical point, we need strong leadership and a clear pathway from government with a long-term strategy for new Covid variants.

“The open/close strategy is crucifying businesses. Every pound of help is much needed. But this package is far too little and borders on the insulting.”

What does Labour say?

Rachel Reeves, Shadow Chancellor, said Labour “will be going through the details” of the new measures for businesses, adding the government had been “dragged kicking and screaming” to announce them.

Shadow Treasury minister Pat McFadden described it as a "holding package from a government "caught in a holding position."

“The prime minister is a prisoner of divisions inside his party and within the Cabinet about whether any further measures are needed and whether they will get past Tory backbenchers," he said.

"That is not the way that crucial public health decisions should be taken."

He said support is "welcome to see" but that Labour we will be going through the details to "see which business and workers are included and excluded."

“Business support should have been announced when the Plan B changes were voted on last week but it has only happened after the Chancellor was dragged back from California to focus on the plight facing businesses and workers here in the UK," he added.