Sunak’s new support package for hospitality and leisure businesses branded as ‘insulting’

Alan Thomas, UK CEO at Simply Business, comments on the announcement of a £1bn bailout package for small businesses: “Small businesses in the leisure and hospitality sector will be breathing a sigh of relief following Rishi Sunak’s announcement of a £1bn support package. Owners in these industries reported a 60% drop in trade in December – usually their busiest month – and the grants will help to offset the effects of rising Omicron cases and reduced trade. “While this latest financial package will provide a lifeline, it’s vital that support doesn’t end here. More than half of all small businesses say they live in fear of future lockdowns, while one in five owners say their business won’t survive 2022 without a strong December. “From our own study we know small retail, hospitality and leisure businesses have been disproportionately affected by Covid-19 – losing a staggering £40,000 each on average due to the pandemic. This is almost double the £22,000 average loss reported across all independent businesses. “Small businesses are the backbone of our communities and economy, accounting for a third of all employment and contributing trillions of pounds a year in turnover – quite simply we all need them to bounce back. It’s crucial that the government support the self-employed through this latest period of uncertainty."

New economic support for the hospitality sector “borders on insulting” and amounts to “far too little”, the Treasury has been told.

Chancellor Rishi Sunak has announced an additional £1bn in financial support for the hospitality and leisure sectorsSunak pledges £1Bn support for hospitality sector with £6,000 cash grants per premises, with every business able to claim a cash grant of £6,000 to help them survive the winter.

The Treasury is also providing a £30m top-up to the Cultural Recovery Fund – which supports institutions such as museums and theatres – and reintroducing the statutory sick pay rebate scheme which allows small and medium-sized companies to claim compensation from the government for the cost of their employees’ sick pay.

But entertainment businesses have condemned the pledge as “inadequate” to deal with the impact that rising coronavirus cases is having on the sector.

Michael Kill, chief executive of the Night Time Industries Association, expressed his disappointment at the newly announced support for the culture sector.

“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,” he said.

“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 insulting.”

Mark Davyd, founder and chief executive of Music Venue Trust, added: “Our initial response is that this funding seems detached from the reality.

“If correct, it would be inadequate to deal with the scale of the problem – we note that grassroots music venues are not even mentioned in the statement despite DCMS having all the evidence they need that losses in this sector alone will run to £22 million by end of January.”

Others welcomed the support, but warned more could be needed if restrictions persist or are tightened.

The British Beer & Pub Association agreed that the short-term package of support is “a vital lifeline” for the sector.

Its chief executive Emma McClarkin added: “It will be absolutely essential that the government continues to monitor and support our sector for the long-term as we ride out the pandemic and into recovery.

“Ensuring our pubs and brewers continue to have the support they need, including further financial support if further restrictions are introduced, along with a clear timeline for the lifting any such measures. Our overwhelming hope is to remain trading and serving our customers and communities.”

The Institute for Public Policy Research said Mr Sunak “should go further” and that “measures to support people’s incomes are needed”.

“Sunak should urgently increase the level of sick pay and expand eligibility so more people can claim it. Additionally, we support putting in place a new furlough scheme and supporting the worst-off with a Universal Credit boost,” Dr George Dibb, head of IPPR’s Centre for Economic Justice said.

Meanwhile, the travel sector accused the Treasury of leaving them “in the cold”.

Clive Wratten, chief executive of the Business Travel Association, said: “It is devastating to see that once again business travel and its supply chain have been left out of government financial support.

“It’s imperative that the arts, hospitality and leisure are given help through the latest wave of the pandemic. However, a vital part of the UK economy and the driver behind global Britain is being left in the cold.

“We urgently need the Treasury to correct this oversight and support our industry into 2022. This is the only way for there to be a safe return to international travel when conditions allow.”

The announcement comes on the day that nationwide research of UK business leaders said that eight out of ten business owners and company directors think 2022 will be worse for business than 2021 with optimism not set to return until 2023 and going on to say they don’t have confidence in the Prime Minister.