Sunak pledges £1Bn support for hospitality sector with £6,000 cash grants per premises

More than a third of companies believe that the chancellor should increase taxes to tackle greenhouse gases as part of “a carrot and stick” approach to driving the transition to net zero.

Chancellor Rishi Sunak has announcing extra support for the hospitality and leisure sectors in England in the run-up to Christmas.

One-off grants of up to £6,000 per premises for businesses in these sectors are being made available.

About 200,000 businesses will be eligible for business grants, which will be administered by local authorities and will be available in the coming weeks, the Treasury says.

It says they are equivalent to the monthly cash grants provided to hospitality businesses when they were fully closed earlier this year.

To support other businesses impacted by Omicron – such as those who supply the hospitality and leisure sectors – the government is also giving more than £100 million boost to the additional restrictions grant fund for local authorities in England.

The Treasury says £1bn of support is being provided in total.

This is made up of:

  • £683 million for grants for hospitality and leisure businesses in England
  • £102 million top-up for the additional restrictions grant for local authorities to support other businesses
  • An additional £30m for the cultural recovery fund to support theatres and museums
  • A statutory sick pay rebate scheme, so SMEs can recover costs for sick employees
  • And £154 million of Barnett funding

Shevaun Haviland, Director General of the British Chambers of Commerce, said: “These measures will provide some welcome respite to many of those businesses who have been hit hardest by the latest Covid measures.

“The Chancellor and his team have engaged with us in talks over the past week, considered the experiences of Chamber business communities and the proposals we put to them.

“We are pleased that the Chancellor heard our call for additional grant funding for hospitality and leisure businesses, which will provide some much-needed support in the face of this increasingly difficult trading period. Clarity and speed will be needed to ensure that these grants are paid out swiftly to help these hard-pressed firms weather the next few weeks.

“Whilst these measures are a positive starting point, if restrictions persist or are tightened further, then we would need to see a wider support package, equal to the scale of any new measures, put in place.

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.

Commenting on the announcement, Rain Newton-Smith, CBI Chief Economist, said: “The Chancellor has provided welcome breathing space to boost confidence and provide support for hospitality and leisure businesses to keep their doors open through tough disruption to their crucial winter trading.

“The latest targeted package offers a fair variety of support to help keep businesses open, with new central grants, flexibility on time to pay and sick pay support for SMEs. All this and more will help keep the economy open as we learn to live with the virus.

“That said, the international travel and tourism sector remains disappointingly out of scope despite the heavy toll it has taken for many months and its vital role in enabling international trade and supporting jobs.

“Business stands ready to work in partnership with Government to lift confidence as we head into 2022 and the critical new year booking period. Ramping up mass-testing, lifting international restrictions as soon as possible, and clear, forward guidance for firms will all be crucial to protect jobs and growth.

“But if infection and hospitalisation rates continue to grow across the country, the potential of further measures will weigh on firms. The Government must monitor the situation closely and ensure that any new restrictions go in lock-step with further targeted cashflow support to those firms most in distress across sectors impacted.”