By William Schomberg and James Davey
LONDON (Reuters) – Britain announced on Tuesday 1 billion pounds ($1.3 billion) 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.
Finance minister 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 around 90,000 a day.
Bars and restaurants in Scotland will be restricted to table service only from Dec. 27 and public New Year’s Eve celebrations will be cancelled.
Prime Minister Boris Johnson said there was not enough evidence to justify new COVID-19 restrictions in England before Christmas, but the situation remained extremely difficult and the government might need to act afterwards.
“We can’t rule out any further measures after Christmas,” he said. “We continue to monitor Omicron very closely and if the situation deteriorates we will be ready to take action if needed.”
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 700 million pounds 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 30 million pounds, while 100 million pounds would go to English local authorities for business support measures and 150 million pounds to governments in Scotland, Wales and Northern Ireland.
On top of the 1 billion pounds, the finance ministry said it would cover the cost of statutory sick pay for COVID-related absences, for up to two weeks per employee, for small and medium-sized companies across the United Kingdom.
Britain borrowed more than 300 billion pounds in the last financial year to help offset the hit to the economy from coronavirus and the government’s lockdowns.
LACK OF HELP FOR WORKERS
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 Chief Executive 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.
($1 = 0.7548 pounds)
(Reporting by William Schomberg and James Davey, Additional reporting by Kylie MacLellan; editing by David Milliken, Ed Osmond and Lisa Shumaker)